Confirmation of Payee (COP) is a system where the details of an individual or organisation that is being paid, “the payee”, can be confirmed so that the payer can ensure that they are sending payments to the correct recipient as opposed to some other individual or organisation.
COP was introduced by Pay.UK and is widely used in many businesses around the country. Normally, banks use financial information such as account numbers and sort codes yet are unable to check names on accounts. The intention of Confirmation of Payee is to change that and add another level of security to payments being made by customers and businesses alike.
How does Confirmation of Payee work?
Confirmation of payee works by checking the name of the individual or organisation given by the payer against the name on the account that is being paid. There are three total outcomes when a COP request is made:
- No (wrong name) – This outcome is where the payee name on the account is totally different from the one provided by the payer, therefore the payment is not processed and the payer is made aware of this.
- No (please check) – Although still a no, this differs from the first outcome as the payer is advised of the correct payee name if the name that they have provided is similar. This gives the payer a chance to update their payment details for this payee and also avoids further confusion.
- Yes – Of course, this outcome is where all of the details are correct, the payer will receive confirmation that this is the case and then can proceed with making a payment.
Which banks use confirmation of payee?
As of 30 June 2020, a lot of major banks started implementing Payee at the behest of the Payment Systems Regulator (PSR). These banks include Lloyds Banking Group, HSBC (including First Direct), Nationwide Building Society, Santander UK and Royal Bank of Scotland Group, covering almost 90% of bank transfers in the UK.
Confirmation of Payee for Businesses – Checklist
1. Making payments
When making payments, businesses must:
- Double-check that all of the details are correct before sending payments. These include bank account number, sort code and the correct name of the payee (business or organisation). Some businesses tend to use a different trading name or a shortened version of the name that may be different than their account name. Check this over.
- If for any reason the COP request bounces back, be sure to contact the payee directly and confirm their details and update your records if necessary to combat potential fraudulent activity.
2. Receiving payments
- When invoicing customers, be sure to use the same name that is shown on your bank account or that of your business. Get in touch with your bank if you are not certain what this exact name is, better safe than sorry.
- Make sure that the payer is aware of CoP or at least are aware of the importance of using the correct and exact details when making payments to you or your business.
No CoP Needed with Hassle-free Direct Debit
When using Direct Debit, there is no need for CoP as payment details are already established when the Direct Debit is set up. There are other safeguards in place when using Direct Debit such as the direct debit guarantee which:
- Notifies the recipient of any changes such as amount, date, or frequency around 10 working days in advance of the payment.
- Provides a full refund for the payer if there is an error made in direct debit payment.
- Allows you to cancel a direct debit at any time by contacting your bank or building society.
The Direct Debit guarantee is used by all banks and building societies that accept instructions to pay Direct Debits.
Need more info?
Choose FastPay for effortless direct debit collection services in the UK.