In her final panel of the day, Finextra’s head of content, Madhvi Mavadiya, hosted a discussion on Confirmation of Payee (COP) featuring Christina Fransson, senior payment product specialist at FIS in EMEA; Greg Huguet, European regional director at iPiD; Paulina Kudlacik, Confirmation of Payee scheme manager at the Nordic Payments Council; and Richard Ross, global payment market infrastructure expert at Swift.
To kick off the conversation, Mavadiya conducted an anonymous poll asking attendees if they understood what Confirmation of Payee is, with 31% answering ‘No.’ This prompted Kudlacik to begin by detailing the history and current landscape of COP.
Kudlacik noted that in the Nordics, COP has been partially integrated into certain areas of the payment infrastructure. Notable examples include legacy services like Account Inquiry in Sweden and Norway, which operate in a file-based, batch manner and lack real-time capabilities, as well as peer-to-peer payments through platforms like Swish, Vipps, and MobilePay. However, a key gap exists in regular account-to-account payments.
“With account-to-account transactions, users do not receive any validation, which can feel like sending money into a black hole,” Kudlacik explained. “Initially, we thought P27 would provide a new payment infrastructure along with account assurance, but that will not be the case. The Nordic Payments Council will maintain its role as a neutral scheme-only body that sets documentation rules and standards. Although P27 will not deliver the technical layer, our scheme remains applicable and will be implemented by another provider.”
Mavadiya then guided the panel to reflect on the implications of the European Commission’s recent instant payments mandate. Ross remarked, “In several jurisdictions, the introduction of COP requirements is driving adoption among organizations, spurred by the necessity to comply. For consumers, this has evolved from being a nice-to-have feature to a baseline expectation across global jurisdictions.”
Kudlacik clarified that when discussing COP functionalities, terms such as Confirmation of Payee, Verification of Payee, and Account Verification are often used interchangeably. However, she emphasized that COP and Verification of Payee (VOP) should be considered separate schemes. Fransson concurred, noting that banks in the Nordics need to comply with both: COP for domestic transactions and VOP for euro payments abroad.
Mavadiya then asked the panel to share successful implementations of Confirmation of Payee globally. Ross pointed to the UK as an exemplary case, mentioning that since its launch in 2020, around 100 organizations have signed up for COP services, achieving over 2 billion COP calls, averaging 1.9 million calls daily. A new PSR regime is expected to further increase organizations’ participation in this service.
Huguet highlighted the Netherlands as another success story. “This has been implemented for some time, yielding significant benefits like an 81% reduction in fraud and a 67% drop in misdirected payments,” he said. He also noted that several countries, including Australia, India, Pakistan, China, Vietnam, and Brazil, have successfully implemented similar COP systems, demonstrating their value.
The discussion shifted to the challenges of transitioning from domestic to cross-border COP solutions. Ross emphasized the importance of considering the scalability of domestic solutions and the necessity for interoperability across different jurisdictions.
Fransson emphasized the need for collaboration both globally and regionally, highlighting the importance of standardized APIs and name checks. She identified two major barriers for banks: outdated legacy systems that lack API support and file-based systems that are incompatible with COP, asserting that COP is designed primarily for instant payments.
Finally, she noted the critical need for effective algorithms that can handle close matches, as both false positives and negatives can jeopardize COP schemes. The conversation also touched on fraud, with Kudlacik noting that while COP can aid in cases of impersonation, it struggles to address social engineering fraud. Huguet agreed, emphasizing that COP should be viewed as a critical but not infallible line of defense.
Mavadiya concluded by asking about the timeline for achieving interoperability in COP systems. Kudlacik remarked on the need for existing systems before interoperability can be achieved. Ross compared the effort required for COP interoperability to the ongoing ISO 20022 migration process, emphasizing the importance of harmonizing communication practices. Fransson reiterated the essential role of collaboration and standardization in overcoming obstacles, while Huguet pointed out that questions regarding liability remain a significant challenge in achieving consensus across jurisdictions.