Pay.UK introduced Confirmation of Payee (CoP) in 2020. The intention is to assist and support Financial Institutions in addressing Authorised Push Payment (APP) fraud. In 2023, criminals stole £1.17 billion, a 4 per cent decrease compared to 2022.
Despite this, criminal activity continues to threaten the UK’s consumers and businesses. Apart from this, there is also the risk of genuine human error, which can cause unnecessary payment errors. Thus, there is a need for CoP expansion in the UK to include more Financial Institutions. In this blog, we look at the benefits of implementing CoP, leaving you with all you need to know about CoP.
A Reduction in APP Fraud
Confirmation of Payee’s name verification process reduces the risk of APP fraud. It also can enhance the detection of fraudulent activities by cross-checking account information. Its successful use cases have also proven it to be very effective in combating certain types of APP fraud, such as Invoice Fraud.
Fewer Misdirected Payments with Name Confirmation
The innovation of CoP ensures that funds sent are to the correct recipient payee name confirmation. It reduces human errors as the PSPs ensure that the name is a match or no match before processing payments.
CoP Boosts Customer Confidence
Enhanced financial security boosts customer confidence in their banks and payment service providers. This ensures that FIs are taking the right steps to protect their finances. CoP also helps reassure consumers and businesses that their money is going to the correct recipient.
Payee Confirmation Enhances Reputation and Trust
Payee confirmation builds trust in the banking service by demonstrating a commitment to security. Smaller financial institutions profit from increased payment success rates. This ensures that FIs retain their customers, particularly those who value security and reliability.
Encourages Digital Adoption
CoP users adopt digital banking because it promises secure transactions and better digital interaction. Apart from that, it also drives the need for technological advancements in the financial sector.
Financial Institutes Can Boast Their Success
With Confirmation of Payee, FI’s lacking large consumer bases can attract clients with secure and reliable payment solutions. They would particularly benefit from consumers who prioritise security in their financial transactions. It also leaves FIs with the possibility of strengthening their position in the market as a leader in security and innovation.
Enhanced Operational Efficiency
Reforming misdirected payments is an expensive process, especially for the PSPs. Lesser misdirected payments mean financial institutions enjoy more cost savings. Aside from that, Confirmation of Payee enables FIs to identify human errors when keying in payments. This in turn reduces the time spent investigating and resolving payment errors.
Confirmation of Payee for Organisations
It enhances the reliability of business operations through prompt and secure payment processing. Accurate payments also help maintain a worry-free transaction history with suppliers and partners.
CoP Reduction in Unforeseen Financial Losses
Since its start, CoP has reduced financial losses. They are due to fraud and misdirected payments. Early rectification of fraudulent transactions increases the profitability of FIs through asset protection.
Modernised and Streamline Process of Payments with CoP
CoP speeds up the payment process by verifying payee details, decreasing the need for manual interventions and checks. Conventional financial institutions benefit from schemes that refine their operations.
Benefiting from Insight into Crucial Data
Data from CoP sheds insights into payment patterns and risks associated with consumers and businesses. FIs can use the information to develop effective strategies creating defences against fraud.
Compliance with Regulatory Requirements
The guidelines apply to all FIs. They allow institutions to follow the PSR’s SD17 CoP Expansion. Timely implementation of CoP mitigates the risk of fines and non-compliance enforcement actions. However, the right solutions will keep making regulatory reporting more accurate and reliable.
How can you benefit from the CoP in 2024?
Not only does CoP fight against fraud, but it also enhances your reputation and increases customer trust in your FI. Don’t forget, you can also be part of a safer future tomorrow with our Confirmation of Payee solutions.
Interested in implementing Confirmation of Payee? Explore TechnoXander’s Confirmation of Payee functionality and contact us today to discover business protection. We’ll get back to you before you know it!
