Specific Direction 17: what the Confirmation of Payee consultation proposes
In short: Specific Direction 17, the Payment Systems Regulator direction requiring payment service providers to offer Confirmation of Payee, expires on 1 November 2026. In consultation CP26/2 of 30 July 2026 the PSR proposes to remove that expiry date, and is seeking views on directing voluntary CoP providers as a new Group 3 from 31 December 2026. Responses close at 5pm on 20 August 2026.
Payment service providers that offer Confirmation of Payee voluntarily have until 20 August 2026 to tell the Payment Systems Regulator whether that choice should become a duty. On 30 July 2026 the PSR opened consultation CP26/2, proposing to keep Specific Direction 17 in force beyond its expiry date of 1 November 2026 and seeking views on directing the firms that adopted the service without being told to. Neither proposal would extend the check to an account that lacks it today, though PSPs authorised in future would have to provide it.
Key findings (PSR consultation CP26/2, 30 July 2026)
- Specific Direction 17 expires on 1 November 2026, after which no payment service provider would be under a regulatory obligation to provide Confirmation of Payee. Source: CP26/2, paragraph 1.7.
- Over 320 PSPs offer CoP checks, over 99% of PSPs initiating Faster Payments transactions offer them, and over 2 million checks are completed every day. Source: CP26/2, paragraph 1.4, and PSR, Confirmation of Payee: Compliance report on Specific Direction 17, 18 November 2025.
- Pay.UK recorded a 59% reduction in claims for payments to the wrong account on Faster Payments since CoP launched, and a 20% to 40% reduction in end-user losses for some types of fraud. Source: CP26/2, paragraph 1.5, citing Pay.UK.
- A new Group 3 of directed PSPs would have to have and use a compliant system after 31 December 2026. Source: CP26/2, indicative drafting, paragraph 3.8.
- The PSR proposes to review the direction once the work of the Payments Vision Delivery Committee and the Retail Payments Infrastructure Board concludes, and in any event no later than five years after the direction is varied. Source: CP26/2, paragraph 2.15.
- Responses close at 5pm on 20 August 2026. Source: CP26/2, paragraph 1.9.
| Group of directed PSPs | Who it covers | Date the system must be in use from | Where the drafting defines it |
|---|---|---|---|
| Group 1 | The 32 PSPs named in the Schedule to the direction | 31 October 2023 | Paragraphs 9.9 and 3.8, and the Schedule |
| Group 2 | Participants in Faster Payments or CHAPS conducting relevant business, which are building societies or hold a unique sort code on the Extended Industry Sort Code Database, and had no CoP system in regular operation when the direction came into force | 31 October 2024 | Paragraphs 9.9, 3.8, 7.4 and 7.5 |
| Group 3 (indicative) | Participants in Faster Payments or CHAPS conducting relevant business, which are not Group 1 or Group 2, and had a CoP system in regular operation on 24 October 2022 | 31 December 2026 | Paragraphs 9.9 and 3.8 of the indicative drafting, inserted by draft Specific Direction 17a |
How Confirmation of Payee became a directed service
Confirmation of Payee is a name-checking service on Faster Payments and CHAPS. Before a payment leaves the payer’s account, the payer’s payment service provider asks the payee’s PSP whether the name the payer entered matches the name on the account identified by the sort code and account number, and returns a match, a close match or no match. The Payment Systems Regulator first required it in August 2019 through Specific Direction 10, which covered members of the six largest banking groups.
In February 2022 the PSR made Specific Direction 11, closing the first technical environment and revoking Specific Direction 10. It then made the current direction on 10 October 2022, in force from 24 October 2022, directing Group 1 PSPs to have and use a compliant system after 31 October 2023 and Group 2 PSPs after 31 October 2024.
Under section 54 of the Financial Services (Banking Reform) Act 2013 the PSR may give directions in writing to participants in regulated payment systems. HM Treasury designated Faster Payments and CHAPS under Part 5 of that Act by orders dated 19 March 2015. Under section 54(3)(c) the PSR may direct specified persons (the Group 1 list) or persons of a specified description (Groups 2 and 3). Under section 54(5) a direction is a general direction only where it applies as mentioned in section 54(3)(a) or (b); the PSR calls a direction in this form a specific direction, a term the Act does not define.
The gap in the Group 3 drafting
The PSR argues that without an obligation, coverage would fall away. Confirmation of Payee works as a network service and depends on the sending and the receiving PSP both taking part. The PSR says that new market entrants after 1 November 2026 would not have to provide it, and that existing participants could stop, weakening coverage over time (paragraphs 1.7 and 2.11). It does not intend to require existing providers to change how they operate the service, nor to change how Pay.UK operates the system, and, subject to consultation responses, does not expect the proposal to create material additional costs for the PSPs it would bring within scope (paragraphs 2.20 and 2.21).
At paragraph 2.7 the PSR describes the second proposal as applying the direction to “all PSPs that currently offer CoP”. In the annexed drafting, which paragraph 2.8 offers as an illustration of the options rather than as settled text, the PSR defines a Group 3 PSP as one that “had a CoP system in regular operation on the date this direction came into force (24 October 2022)”. A firm that adopted Confirmation of Payee voluntarily in 2025 does not meet that description.
It will not necessarily be a Group 2 PSP either. The Group 2 definition also requires the firm to be a building society or to hold a unique sort code on the Extended Industry Sort Code Database, and a PSP with indirect access to Faster Payments through a sponsor does not always hold one. A PSP that meets the Group 2 definition after the direction comes into force is a directed PSP from the following day, under paragraph 7.4, and paragraph 7.5 substitutes that later date into the limb about having no system in regular operation, so a firm already running a compliant system at that point falls outside Group 2 as well. The PSR has drafted no equivalent roll-forward for Group 3, whose date the drafting fixes at 24 October 2022.
At Question 4 the PSR asks whether the differences between the three groups are clear, whether a PSP can tell from the drafting which definition covers it, and whether preserving the historical Group 1 and Group 2 references alongside a new Group 3 is the right approach.
Which payment service providers the direction applies to
The direction applies to a payment service provider that participates in Faster Payments or CHAPS, conducts relevant business, and falls within one of the group definitions. A payment service provider is a participant under section 42(2)(c) and (5) of the Financial Services (Banking Reform) Act 2013 whether or not it has direct access, which section 42(6) defines separately, and the PSR says as much at footnote 6 to the drafting. A PSP conducts relevant business where it provides UK accounts and not all of its transactions are exempt, under paragraph 9.8.
A directed PSP does not have to send or respond to a Confirmation of Payee request for an exempt transaction, under paragraph 4.4, and paragraph 9.9 defines that term at length. Exempt transactions include repayments on a lending product to an account in the payer’s own name, payments from an account established only to repay a lending product, payments to or from a suspense account, and bulk payments. They also include payments sent by an unattended payment routing, a PSP sending funds on its own behalf, CHAPS MT202 general financial institution transfers, transfers to or from the account of a financial market infrastructure, merchant acquiring, payment processing provided to other PSPs, and instructions received by post, email or fax or hand delivered to a branch and not processed with the customer present. A directed PSP that only conducts exempt transactions does not need a compliant system, under paragraph 4.5, but has to notify the PSR in writing within 28 days, and again within 28 days of that position ceasing to apply.
The notification duties apply whichever group a PSP falls into. A directed PSP has 28 days from putting a system in place to notify the PSR under paragraph 3.6, which the indicative drafting disapplies for a Group 3 PSP that already runs one; 28 days from forming the view that it will miss its date, under paragraph 3.7; and 28 days from beginning or ceasing to meet the Group 2 or Group 3 definition, under paragraph 6.2. A PSP may have the system provided on its behalf by another person under paragraph 3.9, and keeps the duty when it does.
Viewpoint
The question that carries the most consequence is Question 6, where the PSR asks whether it should use its general direction making powers instead of its specific direction making powers to require PSPs to provide Confirmation of Payee. Under section 54(3)(b)(iii) of the Financial Services (Banking Reform) Act 2013 the PSR may direct all payment service providers, or every person who is a payment service provider in relation to a regulated payment system of a specified description, and a direction in that form is a general direction under section 54(5). A direction drafted that way needs no Group 1, Group 2 or Group 3, and the definitional question the PSR raises at Question 4 does not arise.
Most of the argument is about the perimeter. A firm’s obligations depend on a category the regulator assigned years ago, and the list ages faster than the market does. The Financial Services and Markets Bill 2026 had its first reading in the Lords on 19 May 2026, and if enacted in its present form would abolish the PSR and transfer its functions to the FCA. At paragraph 2.15 the PSR proposes to review the direction no later than five years after it is varied, and Question 2 asks whether it should commit to a review at all, so the review now being consulted on could fall to the FCA to carry out. Whether an indefinite specific direction is the right instrument to transfer is a fair question for a response.
Frequently asked questions
Does Specific Direction 17 expire?
Specific Direction 17 expires on 1 November 2026 as it stands. In CP26/2 the PSR proposes to remove that expiry date so the direction continues in force until the PSR varies or revokes it. If the expiry date stands and nothing replaces it, no payment service provider will be under a regulatory obligation to provide Confirmation of Payee after that date.
What is a Group 3 PSP under the proposed direction?
A Group 3 PSP, in the indicative drafting annexed to CP26/2, is a participant in Faster Payments or CHAPS that conducts relevant business, is not a Group 1 or Group 2 PSP, and had a CoP system in regular operation on 24 October 2022. Group 3 PSPs would have to have and use a compliant system after 31 December 2026.
Would more accounts get Confirmation of Payee?
Not among the accounts held by PSPs that already offer the service. Both proposals concern which payment service providers carry the obligation, and the PSR does not intend to require existing providers to change how they operate it. At paragraph 2.22 the PSR accepts that PSPs authorised in future would have to provide Confirmation of Payee where they carry out relevant business, and might not have done so if the direction lapsed.
When does the PSR consultation on Specific Direction 17 close?
Responses close at 5pm on 20 August 2026, by email to the PSR’s APP scams team or in writing to the PSR at 12 Endeavour Square, London E20 1JN. The PSR will make non-confidential responses available for public inspection, and asks respondents to identify any items for which they claim commercial confidentiality.
For advice on whether Specific Direction 17 applies to your firm, or on responding to CP26/2 before 20 August 2026, contact Rob Bratby at Bratby Law. The wider directions framework is set out on the PSR and scheme governance page, scope questions for firms with indirect access to a designated system through a sponsor on the payments product, safeguarding and scheme governance page, and a first year of reimbursement data under Specific Directions 20 and 21 at APP fraud reimbursement: the evidence after one year.
