From the community

Modulr becomes first non-bank or building society to launch Confirmation of Payee

September 01, 2020 | Payments

Content provided by Modulr

Modulr
Modulr becomes first non-bank or building society to launch Confirmation of Payee
  • Modulr is the first non-bank or building society to join the Confirmation of Payee service.
  • Confirmation of Payee allows users to check if the payment details they’ve entered for a person or business match the details held by the recipient’s bank.
  • This provides reassurance that payments are being sent to the right recipient and protects Modulr customers from certain types of payment fraud.

London & Edinburgh, UK, 1st September

The FinTech Modulr has today launched Confirmation of Payee, a fraud prevention initiative spearheaded by Pay.UK.

The feature provides an extra layer of defence to protect Modulr’s customers from malicious redirect payment fraud, also known as authorised push payment (APP) fraud. This is the second Modulr product launch to come out of its £10m grant from the Capability and Innovation Fund (CIF) under the RBS Alternative Remedies package. Modulr, an authorised electronic money institution, is the first non-bank or building society to join Confirmation of Payee.

APP fraud describes when a person is tricked into approving a payment to a fraudster’s account, through social engineering, manipulation or deceit. These scams cost businesses and consumers millions every year – and there’s often little recourse to get back stolen money.

That’s because with push payments, users enter the beneficiary’s details and there’s an assumption of trust before the payment is made – as opposed to pull payments such as card-present payments where the user is generally protected by chargeback rights, or Direct Debits.

With Confirmation of Payee, Modulr’s customers will have greater assurance their payments are going to the right recipient when they’re paying a business or personal account. Confirmation of Payee calls on Modulr’s API and automatically checks that the recipient’s name and account details match the information held by their payment service provider.

If the details don’t match, the user will be warned so they can confirm the details with the person or organisation they’re trying to pay. Not only does this help protect against fraud, it also helps to avoid simple mistakes like accidentally mistyping account details when setting up a beneficiary.

The benefits for businesses will be significant. Confirmation of Payee can dramatically reduce the risk of direct financial losses incurred by fraud. It can also save operational costs by reducing the number of payments that need to be investigated or recalled.

Confirmation of Payee will be a powerful tool in industries such as lending. Lenders often rely on bank validation tools to protect themselves against fraud – but these are expensive, can become outdated, and are easy for fraudsters to opt out of. Confirmation of Payee provides a much more reliable and cost-effective alternative, as it draws on the payee’s bank data in real-time.

Confirmation of Payee will also have strong impact in the banking sector. Banks, including neobanks, are fighting two battles when it comes to fraud – they must protect their customers from becoming victims of scams and prevent customers from using their accounts to commit fraud. CoP will help combat both of these scenarios in the banking sector.

Myles Stephenson, Chief Executive of Modulr, says: “We’re committed to delivering the very latest innovation in payments to our customers, and I’m delighted that we are the first non-bank or building society to offer Confirmation of Payee. Thousands of consumers and businesses fall victim to social engineering scams every year in the UK. Modulr is always looking for ways to help our customers keep their money safe.

“We’re pleased to announce the launch of Confirmation of Payee offers greater assurance to businesses and consumers when making payments. This is a crucial step forward in the ongoing battle against fraud and it’s going to help us build a safer payments ecosystem in the UK.”

Brian Cunnington, SME for the CoP project team, Pay.UK says: “We are delighted to see Confirmation of Payee now making a difference in the UK payments environment. The new service offers protection for consumers through the account name checking service, reducing errors and fraudulent misdirection of funds.”

For more information, please read the Confirmation of Payee product guide.

Modulr Club: Digital - Confirmation of Payee Explained

Join us on online at 9.30 on 15th September for a demo of our new Confirmation of Payee product followed by a live Q&A session with our payments experts. Register now.

More in Payments

Curve, Thought Machine partner on credit offering  
Payments
October 19, 2020

Curve, Thought Machine partner on credit offering  

Card consolidation FinTech Curve is working with Thought Machine on a credit and loan offe...

Visa invests in Global Processing Services (GPS)  
Payments
October 19, 2020

Visa invests in Global Processing Services (GPS)  

Payments issuer processor GPS has secured strategic investment from payments giant Visa.&n...

Razorpay is unicorn after $100mn funding round  
Payments
October 12, 2020

Razorpay is unicorn after $100mn funding round  

Indian FinTech Razorpay is now valued at over $1bn following its latest funding. &nbs...

Payments
August 05, 2020

P20: Payments in a Post-Covid-19 World

COVID-19 is undoubtedly one of the biggest challenges we have faced in recent history, both as indiv...

Payments
May 20, 2020

Payments trends 2020

In the year ahead, Deloitte predicts that payments companies will be making “big bets” o...

Payments
March 31, 2020

Understanding authentication and open banking as a Soft POS reality approaches

Following Merchant Payments Ecosystem 2020 (MPE2020), I wanted to share some of my thoughts on Secur...

Money 20/20 USA

Money 20/20 USA

When: Oct 25th - Oct 28th, 2020
Where: The Venetian, Las vegas
Price: £1,700
SCALE

SCALE

When: Dec 08th, 2020
Where: Online
Price: FREE