PSR publishes PS22/3 directing around 400 PSPs to implement CoP

The Payment Systems Regulator (PSR) has published a policy statement, PS22/3, directing around 400 payment service providers (PSPs) to implement a system offering the Confirmation of Payee (CoP) name checking service to their customers, both as payers and payees¹. The statement, published in October 2022, follows a consultation that ran for six weeks and closed on 8 July, to which the regulator received 52 responses from a range of sectors¹.

CoP lets people check that the name on the account matches the details given when setting up a new payment¹. The PSR said the direction continues work begun in August 2019, when it issued Specific Direction 10 (SD10) requiring the six largest banking groups to implement CoP¹. At that point the directed banks covered around 90% of transactions made via Faster Payments and CHAPS, and 21 non-directed PSPs also voluntarily implemented CoP in Phase 1¹. In total, 59 PSPs now offer CoP, the regulator said¹.

The new direction splits the requirement into two groups¹:

The PSR said it prioritised Group 1 based on the complexity and size of the institutions and on the likely impact of adoption on preventing authorised push payment (APP) scams, and that this would increase CoP coverage from 92% of Faster Payments transactions to 99% after October 2023¹. The regulator also said it had removed seven PSPs listed in Group 1 that had delivered CoP since the consultation, meaning 32 PSPs will now be directed under Group 1¹. It added that the majority of existing CoP participants delivered secondary reference data (SRD) capabilities by August 2022¹.

The PSR said its analysis and anecdotal evidence from participants showed some evidence that CoP had helped curtail the increase in some types of APP scams, some evidence of reduced levels of fraudulent funds received into accounts by PSPs that had implemented CoP, and a reduction in accidentally misdirected payments¹. It said it was concerned that many consumers were still not protected, and that fraud received by PSPs not offering CoP had continued to rise while adoption had been slow¹.

Why it matters for households

CoP checks the name on the payee's account against the name and account details given by the payer, giving payers more confidence that a payment is going to the correct account¹. Under the direction, customers of the PSPs named in Group 1 gain access to the service after 31 October 2023, and customers of the remaining directed PSPs after 31 October 2024¹. The PSR estimates coverage will rise from 92% of Faster Payments transactions to 99% after October 2023¹. Until a customer's own provider is covered, that customer may not receive CoP checks when sending or receiving payments, and the regulator said there are still many consumers not protected from APP scams and misdirected payments¹. The PSR has separately published a consultation on a proposal to require all PSPs sending payments over Faster Payments to fully reimburse APP scam victims, with only limited exceptions¹.

What happens next

The PSR said it will ask directed PSPs to submit data to it during spring 2023, and will publish the first set of data in summer 2023¹. Group 1 PSPs must have and use a CoP system with send and respond capability after 31 October 2023, and Group 2 PSPs after 31 October 2024¹.