Confirmation of Payee (CoP) is pivotal for payment security. Two integration models, Direct and Aggregator, offer distinct pathways for CoP implementation.
In contrast, the Aggregator Model, designed for broader participation, extends CoP services by allowing Technical Services Providers such as TechnoXander, showcasing a more inclusive and streamlined approach. This blog conducts a comparative analysis to guide institutions in navigating these strategic choices effectively.
The Direct Model
The Direct Model requires meticulous onboarding, multiple contracts and connections, emphasising the need for continuous maintenance and support.
- The Current and Future Dynamics: In its current state, the Direct Model involves a tri-party agreement. However, moving forward, it’s evolving to a more streamlined process, requiring only the PSP and Pay.UK to sign contracts. In this model, PSPs can leverage TechnoXander’s Cop requester and CoP Responder modules, utilising their identity certificates to connect directly with other PSPs.
- PSP Autonomy: PSPs can maintain control by using their own identity certificates to connect with other PSP. Other PSPs or aggregators connect directly with the PSP via the TechnoXander CoP Responder modules.
- Scaling Challenges: Adopting the Direct Model entails each PSP onboarding with 400 others, creating and maintaining numerous connections. TechnoXander as a renowned CoP provider promises to create, manage and maintain these connections for you.
- Scalability and Speed: To address scalability and quick implementation, Pay.UK introduces the Aggregator Model as an alternative.
Transitioning to the Aggregator Model
The Aggregator Model simplifies the CoP ecosystem by allowing technical service providers (TSPs) to join. Aggregators can use their certificates to identify with other PSPs, streamlining the connection process.
- New Directory Compatibility: The Aggregator Model operates exclusively on the new Pay.UK directory, lacking provision for the existing OBIE directory. PSPs willing to benefit from CoP implementation in Q1 2024 should opt for direct model and utilise Open Banking Directory.
- Implementation Timeline: Pay.UK will be ready with the Aggregator model in Spring 2024, with the legal paperwork consultation closing on January 12, 2024. Dates are subject to participant feedback, leading to some uncertainty.
- Deadline Challenge: The Payment Systems Regulator (PSR) sets October 31, 2024, as the deadline. If the PSPs choose to wait for Aggregator model, then they would have only have a few months to implement CoP. Potential confusion arises if the implementation occurs in late spring, possibly causing PSPs to miss the deadline.
Strategic Decision-Making
Financial institutions seeking to avoid uncertainty must opt for the Direct Model, ensuring stability. However, TechnoXander offers the PSPs an option to transition to the new aggregator model when it goes live, providing flexibility for future adaptations.
Our commitment extends beyond providing solutions – we empower you with knowledge and strategic insights. As the banking industry embraces transformative changes in CoP, connect with TechnoXander to fortify your understanding more about the direct and aggregator.
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