Step 4: Confirmation of Payee
The Destination Bank is asked to confirm the payee
The Account Validation process above confirms that the Destination Account is active, meaning that it is technically capable of receiving payments. In contrast, Confirmation of Payee checks whether an active Destination Account actually belongs to the Recipient that the Sender intends to pay.
This step is skipped if there is no Confirmation of Payee scheme or functionality in the Destination Country. If CoP is available (for cross border payments), then the exact process depends on the CoP model used in the Destination Country. These models are described in detail in Confirmation of Payee, but in simple terms fall into two approaches.

Comparison Model

The Sender provides the expected Recipient Name. This is compared by the Destination Bank to the actual name attached to the Destination Account.
In this case:
    1.
    The Source Bank asks the Sender for the expected name of the recipient at the same time as asking for account number or alias (1).
    2.
    The Source Bank calls the Source Gateway’s Payee API (2), including:
      1.
      the account number and bank identifier provider of the Destination Account (these details are returned from the Account Validation process above, so represent a valid account).
      2.
      The expected name of the Recipient.
    3.
    The Source Gateway forwards the request to the Destination Gateway (3).
    4.
    The Destination Gateway forwards the request to the Destination Bank (4a), or – depending on local arrangements – to the Destination IPS, who will in turn ask the Destination Bank (4b).
    5.
    The Destination Bank compares the expected name against the real name on the account.
    6.
    The Destination Bank returns:
      1.
      a match status (eg Exact/Close/None)
      2.
      (Optional) In some cases, the Destination Bank could also return the real full name of the account holder, where data privacy allows. This would not be shown to the Sender but could be used by the Source Bank in sanctions screening (below). This would aid the Source Bank to do more effective screening based on the real name in the case where the Sender has made minor typos or mistakes in the expected name.
    7.
    This message is relayed through the Gateways to the Source Bank.
    8.
    The Source Bank shows the match status to the Sender before they click “Confirm Payment”.

Nickname and Real Name Model

In this model, the Source Bank provides only the account details (which may have been retrieved from an alias). In response the Destination Bank provides the real name on account and/or a display name (or nickname) to show to the Sender. The Sender is not asked to provide the expected name of the Recipient.
In this case:
    1.
    The Source Bank does not ask the Sender for the expected name of the Recipient.
    2.
    The Source Bank calls the Source Gateway’s Payee API (2), including:
      1.
      the account number and bank identifier provider of the Destination Account (These details are returned from the Account Validation process above, so represent a valid account.)
      2.
      the original alias provided by the Sender (if an alias was used)
    3.
    The Source Gateway forwards the request to the Destination Gateway (3).
    4.
    The Destination Gateway forwards it to the Destination Bank (4a), or – depending on local arrangements – to the Destination IPS, who will in turn ask the Destination Bank (4b).
    5.
    The Destination Bank retrieves:
      1.
      The nickname attached to the alias, if the alias scheme asks Recipients to provide nicknames, OR
      2.
      The real name attached to the account.
    6.
    If a real name is used, the Destination Bank may need to mask the name according to its terms and conditions with customers and local privacy and data protection regulations. For example, the Destination Bank may return the full name, a partially masked name, or just the initials.
    7.
    The Destination Bank returns:
      1.
      The nickname, if an alias was used
      2.
      The full real name on the account. This is visible only to the Source Bank. It will be used in the sanctions screening process which follows but won’t be shown to the Sender.
      3.
      The display name to be displayed to the Sender. This may be fully or partially masked.
    8.
    This message is relayed through the Gateways to the Source Bank
    9.
    The Source Bank shows the nickname or display name to the Sender before they click “Confirm Payment”

Message Flow

Triggered by Get Payee API call.

Last modified 2mo ago