More data, less fraudsters
Issue 288 | 14 March 2022
This week’s Payments:Unpacked is brought to you by SurePay.
SurePay's Confirmation of Payee (CoP) service is an innovative, real-time name checking solution that gives UK payers greater assurance that their payments are going to the intended recipient.
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More data, less fraudsters
Bank transfer scams are costing victims £28,000 every hour (£4.7m a week) and it’s increasing! Between July 2019 and the end of June 2021 over £854m was lost by over 300,000 customers who fell victim to Authorised Push Payment fraud.
Victims are losing more to bank transfer scams every hour than the average UK worker earns a year, while banks only reimburse less than half of the money lost.
Most banks have signed up to voluntarily reimburse all customers who are not at fault but given that this works on a voluntary basis, only 42% of losses was returned, Which? 's analysis of UK Finance figures show.
As a result, £495m has not been reimbursed, leaving scam victims to shoulder net losses at a rate of £4.7m a week – equivalent to £676,881 a day or £28,203 an hour.
Fraudsters are targeting non-Confirmation of Payee (CoP) banks, and so CoP has never been more critical.
SurePay, the leading CoP provider can help you protect your customers against fraud. Their CoP service is an innovative, real-time name checking solution that gives UK payers greater assurance that their payments are going to the intended recipient.
Their Dutch CoP solution, the IBAN-Name Check, has been live since 2017 and checks 99.5% of all payments in the Netherlands. This has helped reduce fraud by 81% and misdirected payments by 67%. SurePay’s CoP solution in the UK already checks 35% of all online payments.
The more data SurePay has, the greater the capability to block fraudsters, all while staying compliant with GDPR.
The introduction of Confirmation of Payee in the UK has been a fantastic innovation and service ubiquity will mean that soon we will all have greater confidence when we make online payments, increase the trust we have in our banks and play a greater part in thwarting the (APP) fraudster.
SurePay, the leading CoP provider can help you protect your customers against fraud.
Mike Chambers, Northey Point
More:
For a Demo, Proof of Concept (No obligation), 1 on 1 or a tech workshop, contact one of SurePay’s colleagues via: info@surepay.co.uk
Or visit SurePay’s website.
APP Fraud: My daily constitutional and nefarious (payment) activities.
SCA Day | 3D Secure
I was pleased to be on BBC Radio WM this morning (14th March) talking to host Chris Blakemore about the introduction of Strong Customer Authentication (SCA) - the biggest change to payments since Chip & Pin rolled out 16 years ago!
An extra layer of security to make online payments safer - helping my bank be really sure that ‘it really is me’ when an online purchase is being paid for.
If you are still asking questions like:
How does 3D Secure work?
Will I always need to tap to approve a purchase?
Why is this happening?
Why is this happening?
…then here’s a couple helpful resources:
Starling Bank: What you need to know about 3D Secure.
Why payment links are the weakest link in digital bill payments
It’s broadly acknowledged that the pandemic has acted as a catalyst for the increased uptake of digital technologies with Deloitte reporting that ‘35% of customers have increased their online banking usage during COVID-19’. With this increased customer demand many banks and payment providers are taking a fresh look at their products and services making remote payment experiences a prominent focus area.
Peter Cornforth at Answer Pay has been exploring why Request to Pay is a secure alternative to payment links in the fight against push payments fraud.
Authorised Push Payment fraud is now the UK’s number one fraud vector with impersonation scams, in particular, rising 123%.
Featured in The Paypers, Peter explains:
How banks have responded to consumer demands for simpler online bill payments.
How Scammers have cashed in on the feeding frenzy to serve consumers with poorly devised ‘pay by mobile’ solutions.
How regulators are stepping in to stem the tide towards pay by link.
Exploring a better way for banks to service customer demand for remote digital payments in a secure manner.
SMS and email are convenient because everyone has access to them. Most people also have a bank app however not every bank app has Request to Pay enabled yet. With the introduction of anti-fraud legislation tackling email/SMS scams, we could see this change. Already a survey of Banks and PSPs by Icon solutions found that 71% of banks are interested in the service with adoption being limited according to 54% by the existing banking technology and systems. With the rise of technology service providers to help banks join the ecosystem, there is an increasing sense that t
More:
Why Request to Pay is needed now more than ever
Pay.UK is hosting a webinar on Monday 4 April at 14:30 – 15:30 GMT where they will be joined by industry experts to discuss what impact Request to Pay can have on UK bill payments for organisations and consumers, especially in today’s rapidly changing landscape.
Request to Pay solutions come in different shapes and sizes and Pay.UK’s design is unique in a number of key ways. Tune in to understand the differences, the rationale behind it, and why Pay.UK think it’s required now more than ever.
Speakers
Kate Frankish, Chief Business Development Officer, Pay.UK
Simon Brooks, Faster Payments Service Line Manager and Business Owner for Request to Pay, Pay.UK
David Cox, Payments Lead, Virgin Media
Tony Craddock, Director General, Payments Association
Tina Harrison, Assistant Principle, University of Edinburgh
More: Why Request to Pay is needed now more than ever.
Open banking’s next big thing could replace Direct Debits
Variable recurring payments could fuel the next stage of open banking take-up in the UK.
VRPs will provide services similar to Direct Debit, but with more control for the consumer, who can automatically make payments of different amounts to suppliers, and set caps on payments.
VRPs not only allow people to vary payment amounts, which direct debits already do, but enable them to cap how much is pushed out for any given payment. They also allow users to cap the total amount that is paid out over a certain period.
It sounds like it’s a very minor change, but it makes a huge difference for corporates receiving money and individuals paying it.
Sean Devaney, vice-president banking at IT services firm CGI.
A less-cash society
Weekly ATM value and volume figures 6 March 2022
The volume of ATM transactions increased by 3% when compared to the previous week in 2022.
The volume of ATM transactions increased by 21% when compared to the equivalent week in 2021.
The volume of ATM transactions decreased by 29% when compared to the equivalent week in 2020.
On average we all withdrew £1,500 from cash machines last year:
Cash is still vital to so many people, millions of people are choosing new ways to pay but, last year, on average, every adult in the UK still withdrew almost £1,500 from cash machines across the country.
Nick Quin, head of financial inclusion at Link.
British cash use in numbers:
More
Metro: Britain is becoming a cashless society – but what are the pros and cons?
This is Money: Has the pandemic changed our relationship with cash forever? Usage of coins and notes will never recover to pre-Covid levels.
Falkirk Herald: New cash machine in Bo’ness is first in Scotland as part of new project.
Scottish Financial News: Scottish consumers have highest cash and mobile payments usage in Britain.
Paid or Delayed?
The health and social care sector have undoubtedly suffered more than most over the last few years with staff shortages, increasing costs and of course the effects of COVID all damaging cashflow.
The problem for care providers is that in times of uncertainty, payment failure rates can increase which makes running a sustainable business that much harder.
Access PaySuite have put together a useful guide outlining how one simple solution, Direct Debit collection, could help alleviate cashflow strains and provide a better payment experience for your clients.
Quick fix BNPL adds to misery of cost of living crisis
With living costs spiralling, Citizens Advice has found that one in 12 people turned to buy now pay later (BNPL) to cover basic costs - such as food and toiletries - in the last six months.
A Citizens Advice poll of 1,124 people who had used BNPL in the past 12 months showed that young people, those in debt and those claiming Universal Credit, are at least twice as likely to have used BNPL for essentials than the general population.
Generally used for higher value purchases such as fashions and electronics, Citizens Advice is particularly worried about the rise of firms offering BNPL for food shopping in the past few years.
The charity’s frontline advisers have been raising red flags on the problems they’re seeing, including a parent using BNPL to buy baby clothes while waiting for a benefit payment and someone in debt using BNPL for the weekly food shop.
Introducing new forms of digital money
Around the world, this shift towards new forms of digital money is no longer merely theory, but is already happening in practice. Different jurisdictions are already moving ahead with projects at different speeds and levels of scale.
In the Bahamas, the world’s first fully deployed CBDC, the Sand Dollar, was officially adopted at scale in October 2020. China’s Digital Currency Electronic Payment (DCEP) system is in advanced trials with live users. Jurisdictions including Canada, Sweden, Singapore, and Thailand, amongst others, have recently or are currently engaged in various stages of pilots and experiments. CBDCs are being taken extremely seriously by actors across a range of sectors, as evidenced by initiatives preceding the Digital Pound Foundation (DPF), such as the Digital Dollar Project in the US, and the Digital Euro Association in the EU.
Initially, at least, CBDCs represented a reaction from central banks to proposed new forms of privately-issued digital money, most notably Meta’s (formerly Facebook’s) Diem (formerly Libra). There has since been a growing recognition of the wider benefits associated with CBDCs beyond their use as payments instruments. This includes opportunities for innovation and competition arising from programmable, digital-native central bank-issued money. Nevertheless, adoption of any CBDC is heavily dependent not only on its technical features, but also the way in which characteristics such as privacy, resilience, security, and consumer protection are built into its design and that of its accompanying infrastructure.
More:
Introducing new forms of digital money by Jannah Patchay, Originating Member, Digital Pound Foundation.
Dave Birch: Digital currency is a form of electronic cash, not another layer on top of electronic money.
Payments Regulation: What is up ahead in 2022?
The regulatory pressure on payments firms continues to grow year-on-year. In 2022, we can expect to see a particular focus on some key areas such as customer communications, Anti-money laundering protocols, SMRC, Operational resilience, governance and control measures and Safeguarding regulations.
Until now it has been relatively easy for EMIs to operate with elementary governance and control measures to safeguard customer funds, often relying on basic, manual processes. However, as the industry comes under greater scrutiny, regulators will expect more strict and transparent plans and controls in place to segregate customer funds more effectively.
Safeguarding is a fundamental process to mitigate consumer risk, and recent cases such as Premier FX have brought to life how important this is. As such, the FCA have every reason to further develop these regulations and encourage EMIs to strengthen their middle and back-office systems to ensure timely, accurate and transparent segregation of client funds.
The basic Safeguarding, governance and control strategies firms currently have in place will certainly fall short as the payments industry continues to expand and consumers adopt its digital payment methods.
Join the Payments Association Insights webinar to learn how other firms are anticipating the future of regulations for EMIS and to gain key insights from our expert speaker line-up on how your organisation can ensure compliance.
SWIFT Update
Deutsche Bank report warns of fallout from Russia's Swift ban.
Leo Lips: Russia, payment systems, and the law of unintended consequences.
In brief
UK’s Payment Strategy Focuses on Fraud Detection, Instant Payments.
"Every part of the world needs Monzo," says (Monzo) CEO.
Tesco Bank brings biometric onboarding to new Pay+ shopping app.
Cash anytime of the day as easy as ABC and other 1980’s adverts from the Griffin
In the edition of Payments:Unpacked Payments Past we featured a Midland Bank adverts from the 1980’s as told (mostly) by Richard Briers.
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