Confirmation of Payee

What is Confirmation of Payee?

Confirmation of Payee, or CoP as we call it in the industry, is a solution that shows you if the money you're about to transfer is going to the right account. It can help remove that 'payment dread' you can feel before making a money transfer, especially if you're transferring a significant amount of money. CoP helps you to verify that the name on the recipient account is the same person or business that you intend to send the money to, so funds end up in the right place.

It can also let you know whether the account is a personal account or a business account. It is useful to combat fraud and misdirection of funds.

Global statistics show that 5.5% of all account-to-account payments where CoP is in place, return a no-match. Putting that in context, for every 500 million transfers (which is the approximate amount of account-to-account payments in NZ per year) 27.5 million could be fraudulent payments or misdirected payments. We want to help reduce that.

How does it work?

As a consumer or business, there is nothing extra you need to do. You set up and process your online payment as you always would. However, with a CoP solution, there’s an additional validation of the details you’ve entered via the relevant banks secure system. So, it effectively is checking or matching the details entered into what’s stored with the bank.

If it’s correct it will indicate that it’s a match, however if it’s not it will inform you that this bank number may not be who it says it is or that it is a person impersonating a business. Also, if you enter a name and misspell it, the algorithm will send back a partial match and even prompt the name you were trying to put in. The consumer or business can then decide if they want to proceed with the payment or not.

Why is this important?

Online fraud is on the rise and fraudsters are getting increasingly sophisticated with their scams. Today it’s hard to know if the bank details are for who they say they are. Fraudsters are using this to their advantage. For large businesses and corporates, Know Your Customer (KYC) is also an important process to validate a business, and Confirmation of Payee can help make this process easier. It can also assist to reduce invoice fraud.

A proven solution in market

Worldline is working with market leading creator of Confirmation of Payee services. This solution is well established and provides payee checks in the EU and the UK. It has performed over 6.5 billion checks since it launched in 2017. It has resulted in an 81 per cent reduction in fraudulent payments to local banks accounts and a 67 per cent drop in misdirected payments.

Worldline will bring this solution to Aotearoa and we are engaging with the banks as we think New Zealand should introduce these checks to everyday transactions for individuals and companies.

Where to find out more information

You can read out more about Confirmation of Payee in our latest blog if you’re a bank and wanting to know how you can be part of the team to bring this solution to New Zealand, talk to the Worldline team today.