Confirmation of Payee is a fraud prevention service that verifies whether the name of the recipient provided by a payer matches the actual name associated with the receiving bank account. This system aims to reduce misdirected payments and authorized push payment scams. It provides an additional layer of security for electronic fund transfers. This validation step helps ensure that funds reach their intended destination.
Context
While primarily a traditional banking mechanism, Confirmation of Payee is increasingly discussed in crypto news concerning the interface between conventional finance and digital asset transfers. Reports often explore how similar verification systems could be implemented for blockchain-based transactions to enhance user protection. The absence or presence of such features influences public trust and regulatory perspectives on digital payment rails.
Global VASPs must immediately integrate Confirmation of Payee systems to comply with the Travel Rule's new anti-fraud and proliferation financing mandate.
VASPs must immediately integrate Confirmation of Payee and ISO 20022 standards to meet the Travel Rule's expanded fraud and proliferation financing objectives.
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