Safer payment scheme faces delay

A system designed to make payments safer could be delayed by up to 18 months because more time is needed for banks to upgrade their IT systems.

Confirmation of Payee has been designed to stop millions of pounds of fraud by simply making the correct name of the person you are paying a requirement for the deal to go through.

Push payment

Push payment is a type of fraud where criminals either hack or intercept emails and use the information from them to pose as legitimate businesses.

They send a payment demand with false details to their victims who believe they are making a payment to someone official, but the money is actually siphoned off into the conman’s account.

The crime is made easier because the current system used by banks to make transfers is to use just the sort code and account number. No check is made on the name of the recipient.

New system

Using Confirmation of Payment banks will be able to check the name of the recipient as an additional security measure.

If the correct name is used the payment will be passed, but if a similar name is used payment will be put on hold and the consumer will be given the actual name of the account holder to check and make sure they are not paying a fraudster.

If the wrong name is used the consumer will be told the details don’t match and the payment will not go through.


UK Finance, the banking trade body, estimates that as much as £236 million a year is stolen by push payments with the average loss being £2,784.

The Payment Systems Regulator (PSR) said it wants the new rules in place as soon as possible, but only when they can be effective.


Giving evidence to the House of Commons Treasury Select Committee, Stephen Jones of UK Finance said the intention of the new rule was to reimburse victims when neither the bank nor the victim were to blame for the fraud with the scheme possibly being funded from insurance.

But he admitted that the scheme would not be ready by the target date of July suggested by the PSR because it meant a complex change in the banks’ IT and processing systems.


Warning consumers to be vigilant when making payments UK Finance advises:

  • Never disclose security details, such as your PIN or full banking password
  • Don’t assume an email, text or phone call is authentic
  • Don’t be rushed – a genuine organisation won’t mind waiting
  • Listen to your instincts – you know if something doesn’t feel right
  • Stay in control – don’t panic and make a decision you’ll regret