Confirmation of payee: What you need to know

What is confirmation of payee?

Confirmation of payee is a security feature designed to help you confirm the name of the account holder you want to pay before you complete a payment. It gives you a clear prompt that shows whether the account details you entered match the intended recipient. If the name you enter doesn’t match the bank records, you will see a warning or a ‘no match’ result.

The goal is simple: to stop misdirected payments and protect you from fraud. This feature has already been rolled out in the United Kingdom and has shown promising results in reducing payment errors and scam-related losses.

How does confirmation of payee work?

The process is straightforward. When you set up a payment to a new payee or recipient, you will be asked to provide the usual details - BSB, account number, and the account name. Once you enter this information, your bank will run a check in real time.

Here is what happens step by step:

1. You input the BSB and account number.
2. You type the intended recipient’s account name.
3. Your bank sends a query to the receiving bank to compare the account name against their records.
4. You receive a response indicating whether the name matches.

If you see a match, you can feel confident that you are paying the correct person or business. If there is a close match or no match at all, you will get a clear warning and will need to decide whether to proceed.

This extra layer of verification happens instantly and is designed to be as seamless as possible.

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Will confirmation of payee improve security?

I believe it will make a meaningful difference to payment security in Australia. One of the biggest issues with bank transfers has been the lack of feedback about whether the account details are correct. Scammers exploit this gap by tricking people into transferring money to fraudulent accounts.

With confirmation of payee, you gain more visibility and control over where your money goes. If the account name does not align with what you expect, you can stop and investigate further before completing the payment.

This feature doesn’t prevent fraud entirely, but it raises the bar and makes it harder for criminals to succeed. In the UK, confirmation of payee has already reduced authorised push payment fraud by providing clearer warnings to customers.

Is confirmation of payee accurate?

No system is perfect, and it is important to understand that confirmation of payee relies on matching names according to the records held by the receiving bank. This means there can be cases where names don’t align exactly even when the payment is legitimate.

For example, if you enter “Tom Smith” but the account is under “Thomas J. Smith,” you might see a “close match” message. In those situations, you will need to exercise your judgement.

Banks use matching algorithms to handle common abbreviations and formatting differences. The system is designed to be helpful rather than overly strict, but it still depends on the accuracy of the name you provide.

If you are paying a business, it’s a good idea to confirm the official account name on an invoice or through direct communication before entering details.

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When is confirmation of payee launching in Australia?

The rollout of confirmation of payee in Australia is being led by Australian Payments Plus (more on them shortly). The feature is being introduced progressively, with major banks and financial institutions implementing it in stages.

I expect that over the next 12 to 24 months, confirmation of payee will become a familiar part of online banking and payment workflows. Some institutions such as Commonwealth Bank have already built it into their payment flows.

If you don’t see the feature in your banking app yet, you can expect it soon. Your bank will likely communicate with you when the service goes live so you know what to expect.

Is confirmation of payee mandatory?

In Australia, confirmation of payee is not yet mandatory for all banks or all payments. However, there is strong support from regulators, consumer groups, and industry bodies to encourage widespread adoption.

I expect that over time, confirmation of payee will become the standard, especially as more banks come onboard and customers grow accustomed to the extra layer of security.

Even when it isn’t strictly required, many financial institutions will choose to implement it to protect customers and build trust.

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What is Australian Payments Plus?

Australian Payments Plus (AP+) is the organisation coordinating the rollout of confirmation of payee across the country. AP+ was formed by combining several key payment platforms, including BPAY, eftpos, and NPP Australia.

Their role is to drive innovation and make sure Australia’s payment infrastructure stays secure, modern, and fit for purpose.

By bringing together these payment schemes under one roof, AP+ is better positioned to coordinate features like confirmation of payee and deliver them consistently across the banking sector.

If you want to learn more, AP+ regularly publishes updates about the progress of the rollout and what banks are involved.

Can I opt out of confirmation of payee?

In most cases, you won’t be able to fully opt out of confirmation of payee if your bank implements it. The system is designed to protect both you and your bank from errors and fraud.

However, you will still have the choice to proceed with a payment after receiving a “no match” or “close match” warning. If you are certain the details are correct, you can confirm and continue.

This flexibility is important because not every payment will match perfectly, but you remain in control of whether to proceed.

If you have concerns about how your information is used during the verification process, you can check with your bank or read their privacy policy.

What are the confirmation of payee terms and conditions?

Each bank or payment provider will set out their own terms and conditions for using confirmation of payee. Generally, you can expect these terms to cover:

• How your payment details are used to check against the receiving bank’s records.
• What happens if there is no match or only a partial match.
• Your responsibility to verify the information you provide is accurate.
• Limitations of the service (for example, that it cannot guarantee the payment is going to the correct person if you proceed despite a mismatch).
• How disputes are handled if something goes wrong.

I recommend reading these terms carefully when your bank introduces confirmation of payee. Knowing exactly how it works will help you avoid misunderstandings and feel confident when sending money.

Final thoughts

Confirmation of payee is a welcome step forward for payments in Australia. It gives you more transparency and control when you make transfers, and it adds another tool to help protect against scams.

As the rollout gathers pace, I expect it will soon become second nature to check for a match before hitting ‘send’. If you stay informed and take the time to review the details, you will be in the best position to benefit from this important innovation.

If you have questions or want help understanding how confirmation of payee works with your business banking, feel free to reach out or explore Thriday’s resources. Making payments safer and simpler is something I feel passionate about, and I believe this new feature is a step in the right direction.