Understanding Confirmation of Payee: Essential Insights and Benefits

Background on CoP

CoP was first rolled out in the UK in 2020 as a response to the growing concerns over fraud and misdirected payments. This innovative service was introduced by the UK’s largest banking groups and financial institutions to combat the increasing incidents of authorised push payment (APP) fraud. By implementing CoP, these banks aimed to provide an additional layer of security for account holders by providing greater assurance that the payee name matches the account details before any payment is processed.

How Confirmation of Payee Works

When you set up a new payee, CoP checks the recipient’s account name, account number and BSB against the bank’s records. If there are discrepancies it will alert you, with options to “No Match”, “Partial Match” or “Full Match”. These alerts help you identify potential fraud or errors before you finalise a payment.

Limitations of Confirmation of Payee

While CoP is a great fraud prevention tool, it has some limitations, particularly for businesses:

1. Not for Complex B2B Payments
   Businesses use multiple trading names or complex account structures so which with CoP can generally result in vague or ambiguous alerts. These alerts require manual verification which slows down the process.
2. Limited for Ongoing Payments
   CoP only checks new payees when you set up a new payee, not subsequent payments. This leaves a gap in fraud prevention for recurring payments.
3. New Suppliers
   CoP’s likelihood matching reduces accuracy when dealing with small or new suppliers. This means it runs the risk of error during supplier onboarding or when supplier details change.
4. Not for Batch Payments
   CoP struggles with bulk payments common in business environments, as it was designed for consumer level payments.

Why CoP Alone Isn’t Enough

While CoP has reduced APP fraud in individual transactions, it’s not effective against Vendor Email Compromise (VEC) fraud. Fraudsters can exploit its weaknesses, especially in complex or large scale B2B payments. You need additional layers of fraud protection tools to fill the gaps.

Investing in a secure solution

Over 2000 businesses in Australia lean into Eftsure’s platform because it goes beyond CoP by offering network-driven, real-time bank account verification. Unlike CoP, Eftsure provides:

• Proactive Fraud Prevention
  Verification starts during vendor onboarding and continues through each payment stage.
• Batch Payment Support
  Handles bulk B2B payments with ease, reducing the risk of errors or fraud.
• Comprehensive Checks
  Has a database of over 7.5 million verified records, the most accurate.
• Bank-Agnostic
  Works with all banks, providing consistency.

By addressing the limitations of CoP, Eftsure gives you a robust defence against fraud and payment errors, across the entire payment lifecycle.

Summary

• Confirmation of Payee (CoP) is a crucial anti-fraud measure designed to verify the recipient’s account name against provided payment details, reducing authorised push payment (APP) fraud and misdirected payments.
• CoP faces challenges with complex B2B payments, ongoing payments, new suppliers, and batch payments, requiring manual verification and additional fraud protection measures.
• Eftsure enhances fraud prevention by providing real-time bank account verification, supporting batch payments, and maintaining a comprehensive database of verified records, working with all banks.
• While CoP is effective in individual transactions, its limitations highlight the need for supplementary tools like Eftsure to ensure robust protection against fraud and payment errors across the payment lifecycle.