Confirmation of Payee (CoP) deadline is fast approaching for Group 2 PSPs

Group 2 PSPs must implement and use CoP by 31 October 2024.

If you are a Group 2 PSP requiring assistance with Pay.UK’s CoP enrolment process or with contracting with an aggregation partner in order to indirectly participate with the scheme, our Payments experts here at TLT can support you.

What is CoP?

CoP is a system used by payment service providers (PSPs) to help mitigate APP fraud risk by validating the payee before a transaction is completed. For example, when making a bank transfer, once the payer has added the payee’s details to their online banking app, their PSP can verify via CoP whether the details match a legitimate account. This helps increase certainty when completing digital payment transactions such as those via the Faster Payments or CHAPS schemes.

Who is required to implement CoP systems?

To improve the security of Faster Payments and CHAPS transactions, the Payment Systems Regulator (PSR) published Specific Direction 17 (SD17), mandating the implementation and use of CoP by certain PSPs.

Group 1 PSPs, as identified and listed by the PSR, were required to have and use a CoP system with send and respond capability by 31 October 2023. For Group 2 PSPs, the deadline is 31 October 2024.

Once a Group 1 or Group 2 PSP has implemented the CoP system, it must provide written notice to the PSR within 28 days. Alternatively, if the PSP cannot implement the system in line with SD17, within 28 days of becoming aware, it must provide written notice to the PSR including reasons and explaining how it is actively trying to remedy this.

Our Alex Williamson, Payments Partner, says...

“We are seeing lots of PSPs choosing to contract with aggregators in order to indirectly participate with CoP. When doing so, PSPs should be weary of signing up to standard contracts that fail to adequately cover any critical outsourcing considerations, as they’re the ones who could land in hot water due to any gaps. Our strong team of experts can assist with any contractual gap analysis and negotiation that PSPs may require, as well as provide guidance on Pay.UK’s enrolment process and related documentation.”

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2024. Specific advice should be sought for specific cases. For more information see our terms & conditions.