In the latest update, the Payment Systems Regulator (PSR) has announced its plan to see around 400 more financial firms provide Confirmation of Payee service (CoP). This will be another significant move toward making transactions more secure and reducing the number of Authorised Push Payments (APP) scams. In July 2021 Confirmation of Payee phase 2 was live and ever since the Payment System Regulator has been keeping a close eye on online frauds and scams.

The pandemic provoked a surge in digital payments and e-commerce while giving fraudsters more opportunities to exploit. As a result, the banking and finance industry has been looking to tackle these transaction frauds and APP scams, and confirmation of payee service is one such additional layer of protection. Banks are securing payments with CoP and making transactions safe.

Bank CoP, as an essential fraud protection layer, will increase coverage from 92% to 99%. As per the Payment Systems Regulator, this will be covering all transactions made via Faster Payments (FPS) and CHAPS (when you make a payment transfer from one account to another. And these transactions are worth approximately £2.5 trillion!

Did you know losses due to authorised push payment scams reached £355.3 million in the first half of 2021. Concerned with these figures, more and more financial firms are voluntarily implementing and adopting the Confirmation of Payee service. You can too quickly adopt CoP to offer safer services to your customers through payee confirmation.

A step ahead with CoP

Pay.UK successfully implemented Phase 1 and Phase 2 Confirmation of Payee services and is now looking to take things further by including more banks and financial institutes to adhere to CoP services.

The Confirmation of Payee banks offer a layer that lets a person verify bank account details before initiating a transaction. As simple as confirming the payee's name to match the name on the intended recipient's bank account, customers can avoid misdirected payments and reduce push payment fraud to a great extent. Exela’s Confirmation of Payee service is an internet-facing web solution, adheres to the latest specification by Pay.UK, and conforms to the security requirements of Open Banking - a solution that can assist you in securing online transactions and payments.

While moving towards a safer payment environment, we still need to keep out for fraudsters. Not only are they getting smarter with their tech-savvy, but they are also working their way to softer targets with their tactics. Exela Confirmation of Payee system uses AI and advanced matching algorithms for efficient and quick checks. We aim to make payments safer for you and our customers!

Get in touch with you today and learn how you can benefit with Exela’s CoP UK service.

We all can agree to have been overly concerned with online payments - double checking and ensuring if the details are accurate before transactions, or being worried of online scams. As per the UK Finance report, an estimated £376.5 million were lost in e-commerce fraud on cards alone in 2020 - which grew from £139.6 in 2011 and crossed £300 in 2016.

Total losses due to authorised push payment (APP) scams increased to £355.3 million in the first half of 2021, up by 71 per cent compared to the same period in 2020. These numbers are shocking and have been a matter of concern for everyone.

Digital payments are undoubtedly powerful and instant, but they certainly require additional advanced safety features and caution. The gap to fill this uncertainty and make payments safer - validation of details needs to be accurate.

A service to verify bank account details - Confirmation of Payee (CoP)

CoP is a service that verifies the payee's bank account details before sending payments. It acts as an additional layer of payment protection and warns against sending payments to any non-verified payee account. These validations reduce the risk of payments to the wrong account holder, payment investigations and adjustment costs, fraud losses, and more.

It provides greater assurance - through validating bank details, helping them avoid making accidental, misdirected payments to the wrong account. In addition, it intends to provide an additional layer of protection in the fight against fraud, particularly Authorised Push Payment (APP) scams.

As a customer or business, whether you are setting up a new payee or amending an existing payee's details, CoP will confirm whether the provided details match the person or organisation's account.

Exela CoP is an internet-facing web service, adhering to the latest specification by Pay.UK, and conforming to the security requirements of Open Banking - a solution that can assist you in securing payments.

Now that Brexit’s deadline has come and gone, there’s a new deadline on which U.K. banks are focusing. By March 31, 2020, all must implement processes complying with “Confirmation of Payee,” a regulation put into place by the U.K. payments authority, Pay.UK, that is intended to fight payment fraud in the context of real-time payments by giving bank customers assurance their payments are directed to their intended recipient. Essentially, Confirmation of Payee (CoP) automates payee-verification before a payment goes through in real-time.

A number of large U.K. banks have already adopted CoP. Others still lag behind, which might seem surprising considering the pounds equivalent of more than $430 million was lost to payment fraud in 2018 alone. But the deadline looms, and Exela is prepared to assist its global banking customers with its own CoP solution, which leverages the Open Banking Directory and artificial intelligence to exchange CoP requests and work toward validating destination and account holders. Exela’s solution, which debuted at Finovate Europe 2019, is part of its highly-regarded Banking and Financial Services Suite and is expected to work as an important step in the process of combatting payment fraud.

In a recent article for B2C, Exela’s Senior Vice President, Business Strategy and Sales, David Jones, reviewed the imminent need for CoP in the U.K. and the how Exela’s solution works in a way that will be transparent to bank customers (except in those instances when a mismatch is identified). Jones also notes that due to Exela’s flexible deployment model, the service can be delivered to banks at a relatively low cost.

“We are excited about the expansion of our global banking solution with the launch of Exela CoP,” notes Vitalie Robu President EMEA, Exela Technologies. “Our team will continue to explore new technology-enabled solutions to improve the lives of our customers, and work with global financial institutions to automate their business processes.”  

Around 90% of everyone either shops or banks online, or both. Unfortunately, this has spawned a virtual cottage industry for payment fraudsters. In fact, approximately 63% of businesses have experienced fraud losses in the past 12 months, with $1.2 billion having been stolen during 2018 in the U.K. alone. Enter Exela’s new Request to Pay solution, on which it has partnered with Mastercard Vocalink in the U.K. Under the venture, Exela is developing the Request to Pay Solution, which Mastercard will host and run and Exela will act as distribution partner.

What is Request to Pay?

Request to Pay is a secure messaging service for overlay on top of existing payments infrastructure as a new flexible way to settle bills between businesses, businesses and individuals, and individuals and social contacts. Request to Pay allows end-user solutions to interconnect, and at the same time, provides the basis for the development of new pan-European payment solutions. 

For each “request to pay” transaction, the payer and biller will have the opportunity to communicate in real-time. Supporting and expanding e-commerce and opening up opportunities for value-added services to existing repertoires (such as transaction-financing, liquidity financing, and cash management). Overall, Request to Pay should reduce reconciliation costs and reduce fraud for all parties.

Let’s walk through a Request to Pay use case

For example, let’s envision a consumer traveling for business. Through Request to Pay, the consumer purchases train tickets, and in return, receives a payment confirmation through the communication platform. That’s nothing new, of course, but there’s plenty of opportunity for adding on for the benefit of all parties, as we’ll see. For example:

• The transportation company can use the communication platform to upsell (for example, ticket upgrades) and cross-sell (for example, amenities for the train ride), in all cases, allowing pre-payment with electronic confirmation, and as an add-on, payment and financing options.
• Through partnerships with hotels, restaurants, shops, and attractions at the destination, the platform can be used to cross-sell additional goods and services to the consumer, for which the consumer can utilize the same variety of payment options.
• Billers can use the platform to apply for invoice financing, while the bank can use the platform to analyze investment risk, initiate credit checking, and manage payments.

Request to Pay at the European Digital Banking Summit

Exela recently had an opportunity to present Request to Pay at the European Digital Banking Summit (EDBS) in Berlin, Germany in late November 2019. The EDBS is a private invitation-only gathering that plays host to a community of senior digital banking and FinTech leaders from across the European Banking sector who come together to address key challenges and opportunities within the industry.

There were approximately 50 banks and financial institutions in attendance, although the setting was refreshingly personal, according to Ralf Kastner, Christ Vincent, and Huib Gerrits, who represented Exela at the event.  We also gave a series of 30-minute one-on-one presentations to a select group of banks and other financial institutions. We look forward to rolling out our brand new Request to Pay product demonstration in the months to come.

Stay tuned for 2020 updates to our Events calendar, and don’t miss Exela at the 2020 Diamond Resorts Tournament of Champions in Orlando, Florida. We’re a proud premium sponsor and are hosting two pro-am teams of four golfers.