Fraudsters and scammers have become emboldened in recent years by technological developments, global connectivity and access to the internet. This is being noted by various stakeholders, from the UK to Australia.
In the latter, the Australian Banking Association (ABA) and Australian Payments Plus (AP+) have announced an initiative to enable Australian consumers to pay to an account with a name, B2B and account number.
This system, it is hoped, will confirm the account name of a payee before the payment is made, reducing the risk of fraud. The two organisations state that this will add another layer of protection to prevent scams and fraud.
Dubbed the ‘Confirmation of Payee service’, the initiative will use a central matching service to determine a name match based on data provided by a payee’s financial institution. This is then compared to the account of the payer, who will then be informed whether or not the person is a match.
“Developing a Confirmation of Payee solution is an important step forward for the industry in the pursuit of combatting scams and frauds,” commented Lynn Kraus, CEO of AP+.
“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.”
Fraud is catching the attention of regulatory authorities and consumer rights groups globally, with various companies reporting millions of losses per year. Authorised push payment (APP) fraud in particular has been a headache for the payments sector.
In the UK, the Payments Systems Regulator (PSR) has gone down the route of regulating the payments industry. Specifically, the PSR will require payments firms to have sole responsibility for reimbursing victims of fraud – this has received some pushback from the industry, however.
Other conversations have revolved around what technology can be used, like Artificial Intelligence (AI), and how data can be used to prevent fraud. In Australia, the ABA and AP+ have opted for all account data to remain with the payers’ financial institution, instead of using a central database. This may prove useful in bundling up consumer trust in the new initiative.
Anna Bligh, CEO of the ABA, said: “Banks are investing in this new service so customers have another important layer of protection against scammers. 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.”