July 2019: PIF members met at the Mastercard offices in Canary Wharf for updates on a selection of fintech hot topics, including the latest on Confirmation of Payee (CoP) and Strong Customer Authentication (SCA) under PSD2.
PIF members can access the supporting presentations and assessments of the latest developments in the members’ area of the PIF website.
Confirmation of Payee – Phase 2
There are two implementation phases for CoP with Phase 1 including all UK addressable sort code owners. All further PSPs, including those with second reference requirements, (i.e. HOCA or pooled accounts) will be included in phase 2.
Brian Cunnington from Pay.UK updated members that an advisory group had been formed to support the second phase of the CoP roll-out. The group comprises representatives from participating PSPs and EMIs. There will also be a series of workshops with a specific group for vendors to explore the technological changes that need to be introduced to enable the second phase. Pay.UK’s target is to include PISPs and HOCAs by the end of Q3 2020. PIF members who do operate collection accounts should contact Pay.UK (cop@wearepay.UK) now to gain access to technical details and the rules (provided under a NDA).
PIF members also learnt that consideration has been given to how each phase will be communicated to consumers and how this will be implemented. It was noted that the PSR could have mandated all PSPs to implement CoP but has instead taken a measured approach that will cover 90% of Faster Payments transactions. This will generate knowledge and expectation from customers around how CoP works and should drive the thinking of firms not included in phase one to make CoP a priority.
PSD2 SCA – Where are we now?
In a presentation that one PIF member described as “the best assessment of the EBA’s opinion I’ve heard so far”, members gained clarification on areas including common approaches and the technicalities of permissible SCA methods. Members heard an expert assessment from Tim Richards of Consult Hyperion on what the EBA has said about deadline to implement SCA and how other national regulators have reacted to the EBA Opinion. Members learnt that the EBA Opinion does not mention that another (yet to be defined) deadline is looming and that there are some calls for an 18-month delay which may not be politically acceptable. Tim also provided an excellent assessment of the EBA Opinion on what constitutes valid SCA methods.
PIF members should be ready to provide their migration plans to the FCA; advice on what the FCA requires from firms is expected. Depending on where PIF members sit in the ecosystem, there will also be a requirement to show how they plan to ensure their merchants or their customers are aware and prepared.
PIF Member Resources
To access our guidance paper Confirmation of Payee: Implications for non-bank PSPs and how it applies to PIF members, visit the members’ area of the PIF website.
To view and contribute to the PIF SCA Q&A database, go to the PIF LRWG board on Trello.