AP+ to lead phased development of confirmation of payee

John Kavanagh

Following last month’s announcement that banks will develop a confirmation of payee system as the priority project for the industry’s new Scam-Safe Accord, Australian Payments Plus has detailed the work it will do with New Payments Platform participants to deliver the service over the coming year.
 
AP+ said confirmation of payee would help reduce scams that involve misdirection of payments to an account that does not belong to the intended payee. It would also help avoid mistaken payments to incorrect account numbers.
 
It said the proposed solution involves using confirmed BSB and account number data with either payee name display or account name matching being presented to the payer.
 
“This service would be delivered via NPP infrastructure, standardised APIs and a centralised account matching service managed by AP+,” it said in a statement.
 
“The solution will also seek to leverage additional payment and account data, derived from other financial institutions or potentially third parties about potential scam accounts, which could be incorporated into fraud mitigation strategies and risk assessment by participating financial institutions.”
 
AP+ said consultation with NPP participants indicated there was interest in a phased delivery approach. It will start the design phase this month, with capability to be delivered by the end of 2024.
 
As the first phases of capability are delivered, financial institutions could offer an interim service based on observed data within their own banking channels.
 
As additional capability becomes available later next year, NPP participants can start supporting centralised matching of information entered by payers with account data held by payee banks and display these results to payers.
 
“The ultimate confirmation of payee service is likely to include displaying the payee account name to the prospective payer, only if the name is a match or close match to the name entered by the payer. If the name provided by the payer does not match the name held by the payee’s financial institution, then the payee’s name will not be displayed.”
 
If there is no match, payers will get an alert asking them if they are sure they want to go ahead with the transaction.