One of the key commitments of the banking industry’s Scam Accord has hit a major milestone, with lead developers Australian Payments Plus (AP+) and the Australian Banking Association (ABA) confirming key design features of their new Confirmation of Payee service.

The anti-scam system, which the banking sector has collectively committed $100 million to develop, will enable payers to confirm the correct name, BSB and account number of a payments receiver (or payee) before initiating a payment.

“This significant tool adds a layer of protection in the prevention of scams and frauds resulting from misdirected payments as well as reducing mistaken payments by consumers,” AP+ wrote in a statement.

A key commitment of the banking industry’s Scam Accord, the Confirmation of Payee service is designed to sit atop Australia’s dedicated fast payments rail, the New Payments Platform (NPP), helping to avoid misdirected payments before they hit the rail.

AP+ said it expects the function to be ready for implementation by Australian banks in early 2025.

Among the agreed to features of the new Confirmation of Payee system include:

1. A central matching service, which will determine a name match based on account data provided by each payee financial institution when compared to the account name entered by the payer.
2. Where a name match result is a match or close match, a name display will be provided to the payer – if the result is not a match, then the name of the account holder will not be displayed.
3. Where the payee is an account held by more than one person, only the person named by the payer will be displayed, along with an indication that there are other account holders (‘and others’). It will not display the other names associated with that account.
4. There will be no central database. Instead, all account data will remain with the financial institution or service provider.

Global payments messaging developer SWIFT has been enlisted to build and manage the central matching service that will underpin the Confirmation of Payee service.

ABA chief executive Anna Bligh said the new service would give customers “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.

Lynn Kraus, AP+ chief executive noted that, beyond the membership of the New Payments Platform, the payments body “solicited input from over 50 community groups”, noting that “broad-based community support for the solution will be vital to its effectiveness”.

She added: “[AP+] 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.”

The new service is expected to be rolled out in phases, with centralised capability including account matching logic and standardised APIs being progressively built and tested throughout 2024.

This, AP+ said, would enable financial institutions to integrate the service into their banking channels from early 2025.