Banks not ready for ‘confirmation of payee’ service, even in UK

Most of the UK’s banks will not be ready until next year to roll out a new ‘confirmation of payee’ service designed to cut the risk of money being sent to the wrong accounts, according to finextra.

Currently, the account name is not checked when sending an electronic payment – and fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.

Last year Pay.UK said that it will change this, creating a new hurdle for fraudsters and giving effective warnings to customers about the risks of sending to an account where the name did not match.

When customers set up a new payment, or amend an existing one, banks will be able to check the name on the account of the person or organisation being paid. If the account name is correct, customers will receive confirmation and can make the payment. If the name is nearly but not quite correct, they will be given the actual name to check and then update the details. If the name is completely wrong, they will be advised to contact the recipient to get the correct details.

Initially, the first stage of the service was set to be up and running this month, with the second stage ready by July. The technology has now been enabled but several banks contacted by the Telegraph have said they are not ready to roll it out.

RBS, Lloyds, Nationwide, HSBC, TSB and Santander are all yet to introduce it, with the industry seeming to be working towards an end-of-year target.

Mastercard-owned Vocalink has taken the opportunity to push its account verification technology, which helps ensure that banks are able to match the name of the account holder to the sort code and account number with a high degree of accuracy.