Confirmation of Payee (COP) plays a crucial role in the instant payments infrastructure by verifying account names before transactions, ensuring that funds are directed to the correct recipient.
The service serves as a safeguard against fraud and enhances consumer trust. Globally, COP has been embraced in countries such as India, Pakistan, Australia, Vietnam, China, and Brazil.
Recent European mandates for instant payments will obligate Payment Service Providers (PSPs) to process euro transactions within seconds. These requirements are expected to drive more banks to adopt Confirmation of Payee, providing customers with greater visibility into their payment processes.
In the UK, COP has proven successful, with over 100 financial institutions utilizing the service. The rollout of the new Payment Services Regulation (PSR) scheme is likely to spur even more organizations to follow suit.
For broader adoption of Confirmation of Payee, interoperability between systems is essential. Transitioning to ISO 20022 can facilitate harmonization and data sharing among banks and providers, or a unified pan-European solution may be necessary.
EBA CLEARING recently announced plans to offer Verification of Payee at a pan-European level starting in December 2024. This rollout is a key part of their comprehensive preparation program in collaboration with their user community.
With Verification of Payee, PSPs will be able to provide IBAN/name matching services for SEPA transactions, in accordance with the European Payments Council’s scheme.
As new instant payment systems are adopted across European financial institutions, the agenda for EBAday 2024 highlights the importance of instant payments and regulatory discussions shaping the future payments landscape. In light of the evolving financial crime landscape, payments security must also advance.
To learn how leading organizations are tackling fraud prevention and advancing global real-time payments, join EBAday in Lisbon, Portugal, on June 18-19, 2024. Register here.