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. In the UK, CoP was officially launched by Pay.UK in 2019 and has now been successfully implemented by a number of UK banks, building societies and other payment service providers (PSPs).

Given the importance that CoP could play in making payments safer, we sat down with David-Jan Janse, Co-Founder at SurePay to get his views on the potentially large impact this system can have in fighting fraud.

Hello David, it is a pleasure to sit down with you today. Let’s move straight into the first question. Since its foundation in 2016, SurePay has played a key role in shaping Confirmation of Payee (CoP) Services both in the Netherlands and the UK. What has been the main challenge you had to face when working around CoP technology? 

“In 2016 CoP didn’t exist, banks thought that it was impossible to check each other’s bank accounts and the solution was not mandated. Because of this we had to develop our algorithm from scratch, design it specifically for a CoP solution which enables checks without disclosing more information than was permitted. It’s this algorithm that convinced the major Dutch banks to jump on the bandwagon – and we have performed four billion transaction checks since then in the Netherlands alone.

When entering the British market, we had to revisit our algorithm to ensure it is fully compliant with Pay.UK’s CoP rules and standards – and we’re now successfully handling over 300,000 name checks every day for our UK customers, making us the leading market provider. User experience was a major focus for us when launching in the UK. We designed our solution to offer users a seamless experience and not interfere with their journey unless necessary. Currently, our solution offers the best results: highest ‘matching’ percentage – at 77%, highest ‘close matches’ – at 18%, and lowest ‘no match’ – at 5%”.

During one of our conversations, you touched upon two different typologies of Confirmation of Payee? Can you explain to us what they are, how they differ from one another, and if there is also a difference in terms of final results?

“Phase 1 was introduced in 2020 by Pay.UK. In the same year, we partnered with NatWest, one of the UK’s largest banks. Having implemented CoP from the get-go means that NatWest is now at the forefront of payment security. 

This phase provided a name checking service for all UK based payments and was offered to all eligible participants (i.e., those registered as a full Open Banking member for PSD2 purposes). 

Phase 2 expands the eligibility criteria and allows all accounts holding PSPs to participate in the CoP service. This means all Phase 1 participants, plus:

• FI’s who are unable or unwilling to meet the full Open Banking PSD2 requirements.
• FI’s are regulated by non PSD2 NCAs, such as those based in the Crown Dependencies.
• Accounts addressable by secondary reference data.
• PSPs that do not have their own sort code, such as Collection accounts.

As adoption of CoP increases, fraudsters are taking advantage of gaps in the market and moving to non-CoP banks as their customers are easier to target. It’s important that the industry now hurries to fill these gaps in order to keep consumers and businesses safe when making payments online”.

Do you think Confirmation of Payee is the right answer to fight fraud worldwide? Given your direct experience on the field, do you have any number to give us when it comes to CoP vs fraud? 

“APP fraud is on the rise, with the latest figures from UK Finance showing a 71% increase during the first half of this year, for the first time overtaking card fraud. APP fraud losses stood at £355.3 million, compared to £261.7 million in losses from card crime. The Covid-19 pandemic forced payments to digitalise at an incredible speed – something the industry did not foresee. This made it hugely important for banks and other FIs to implement CoP. 

CoP on its own will not eliminate bank transfer fraud. People need to be more agile and ensure they do not ignore the “no match” CoP warning and confirm they’re using the correct details. With that being said, we have seen great results post-CoP implementation. 

In the Netherlands, 99.5% of all payments are checked. This has helped reduce fraud by 81% and misdirected payments by 67%. In the UK, eight banks are currently using our CoP solution, resulting in SurePay checking over 30% of all digital payments. We have a “no match” rate of 5%, meaning that our algorithm leads to the lowest number of false warnings, ensuring a seamless user journey, more flowing payments and increasing consumer trust”.

Given the current state of Confirmation of Payee in the UK and Europe, what do you think will be its evolution both in the ‘old continent’ and worldwide?

“With CoP in its second phase, we will see an uptake in banks, building societies and PSPs adopting the solution. The natural progression of things means that we will soon see an increasing number of organisations adopt the solution as well. And finally, a little further down the road, we will see powerful CoP solutions for checking cross-border payments as well. 

We are currently expanding in Europe with the aim to make international payments safer by providing cross border CoP checks in addition to domestic CoP checks. SurePay is also connecting to other schemes in Europe. Countries with access to SurePay’s CoP can be connected with SurePay’s Cross Border CoP router. SurePay Cross Border will also be available to financial institutions (FIs) and corporates. 

In the Netherlands already 150 corporates use CoP for Organisations in their business processes. This leads not only to a drop in fraud and misdirection, but also to more efficiency and less manual actions.

Our solution has made domestic payments in the Netherlands and the UK safer for more customers than ever before, but we are ultimately driven by our ambition to continue increasing our reach and expand internationally”.

In early September we read about your latest successful funding round. As you are on a mission to protect both our clients and their customers against the growing threat of fraud worldwide, what are your future plans to achieve these great objectives?

“The funding round will be used to hire new business developers in Germany and the UK, as well as new IT experts to help scale the technology platform and to develop new solutions for our customers. This means that more and more people will have access to an enhanced version of our service.  

Among some of the projects we’re currently working on are launching bulk payments related products, cross border payments checks capabilities and expanding SurePay PayID, a Pay Your Contacts solution.

We benefit from the backing of two great investors, both specialising in scaling B2B SaaS solutions internationally. But most importantly, they believe in our mission to make payments personal, more accessible and even more secure, and by working together, we’re inching closer to our goal”.

[For this interview, Giovanni Caccavello, Head of Research and Blog at OBE, sat down with David-Jan Janse, CEO and Co-Founder at SurePay]

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To learn more about ‘Security in the world of Open Finance‘, you can watch our February 2021 Campfire below.

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• How Revolut Plans to Use Open Banking in 2021 | Peter Balaskas, FinCrime Fraud Manager at Revolut.