Australian Payments Plus selects confirmation of payee solution

Australian Payments Plus (AP+) has selected global financial messaging platform, Swift to develop a new payment confirmation system, designed to combat rising scams and fraud.

The decision follows the decision by the banks to act against the rise in financial crime under a new ‘Scam-Safe Accord’ released late last year and aimed to deliver higher protection levels for customers against scams.

The new ‘confirmation of payee’ system plus the extra security controls shape part of six targets set out under the new accord.

AP+ selected Swift to build the new confirmation of payee system earlier this March with the company also developing the New Payments Platform (NPP)

The new system will operate by guarding consumers from fraud by confirming the identity of the payee before a payment is made. 

The platform will compare the payee’s name entered by the payer with the name associated with the payee’s account and delivered via the NPP. 

All banks are to roll out the new name-checking technology so customers can safely identify who they are transacting with. 

The new system design will start straight away and it will be built and rolled out over 2024 and 2025. 

An Australian Payments Plus spokesperson told Digital Nation, “The NPP went live in 2018 with PayID which enabled payments to be directed using an easy-to-remember alias or identifier such as a mobile phone number or email address.”

“Customers opt into the PayID service with their financial institution by registering a PayID that is linked to their bank account. 

“When using PayID, the person making the payments sees the name of the person they are intending to pay. Adoption of PayID has been strong over the years and there are now close to 20 million registered PayIDs.”

However, according to the spokesperson, “while this organic take up has been good, there is the need to take greater efforts to protect consumers and businesses”.

This is done “by developing capabilities that will enable payers to see who they are paying for all payments, including those being directed using a BSB number.”

“Some financial institutions have also developed their proprietary services for their customers which aim to identify if the account name matches the payment details provided by the payer by utilising their historical data,” the spokesperson added. 

The spokesperson said the tech stack used by Swift is the COP service which “will leverage existing NPP infrastructure that supports the underlying payment rails with a new central account matching service and standardised APIs.” 

“These capabilities are being developed by Swift to cater to the domestic needs of the NPP payments infrastructure.”