Australians are now one step closer to having access to another important layer of protection against scammers with the design of the new Confirmation of Payee service now complete.
Australian Payments Plus (AP+) and the Australian Banking Association (ABA) announced this important milestone today which, when rolled-out, will enable people paying to an account with a name, BSB and Account number to confirm the account name of the payee before the payment is made.
This significant tool adds a layer of protection in the prevention of scams and frauds resulting from misdirected payments as well as reducing mistaken payments by consumers.
Key features of the Confirmation of Payee service are now agreed:
- A central matching service will determine a name match based on account data provided by each payee Financial Institution (FI) when compared to the account name entered by the payer.
- Where a name match result is a match or close match, a name display will be provided to the payer - if the result is not a match, then the name of the account holder will not be displayed.
- Where the payee is an account held by more than one person, only the person named by the payer will be displayed, along with an indication that there are other account holders ('and others'). It will not display the other names associated with that account.
- There will be no central database, rather all account data will remain with the FI or service provider.
Lynn Kraus, CEO of AP+ said, "Developing a Confirmation of Payee solution is an important step forward for the industry in the pursuit of combatting scams and frauds. In addition to working with the New Payments Platform (NPP) participating institutions that will be involved in implementing this solution, we have solicited input from over 50 community groups in an effort to ensure we have a broad perspective of views. Creating broad-based community support for the solution will be vital to its effectiveness.
"At AP+ our purpose is to unite people and technology to power better experiences, and I believe the Confirmation of Payee solution delivers to that purpose. We are in a unique position to bring industry groups together to create a solution that will help everyone reduce mistaken payments and combat scams and frauds."
Anna Bligh, CEO of the ABA said Australia's banks were investing $100 million in this new anti-scam technology to provide even more safeguards to customers.
"Banks are investing in this new service so customers have another important layer of protection against scammers," Ms Bligh said.
"Customers will have more confidence that they are transferring money to the right person and not to a potential scammer.
"We are one step closer to having a new weapon in the war against scammers. It forms part of the sector's Scam-Safe Accord which is a set of world-leading safeguards by banks to help keep the money of Australians safe.
AP+ has selected SWIFT to build and manage the central matching service which underpins the Confirmation of Payee service. The new service is expected to be rolled out in phases, with centralised capability including account matching logic and standardised APIs being progressively built and tested throughout 2024, allowing financial institutions to integrate the service into their banking channels starting in early 2025.
