Currently, the account name is not checked when sending an electronic payment - and fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.

Pay.UK (which until today was called the New Payment System Operator) is looking to change this, creating a new hurdle for fraudsters and giving effective warnings to customers about the risks of sending to an account where the name did not match.

From next year, banks building societies and other providers will be able to roll out the service. When customers set up a new payment, or amending an existing one, banks will be able to check the name on the account of the person or organisation being paid.

If the account name is correct, customers will receive confirmation and can make the payment. If the name is nearly but not quite correct, they will be given the actual name to check and then update the details. If the name is completely wrong, they will be advised to contact the recipient to get the correct details.

The matching decision is made by the intended recipient’s bank, as they have the best knowledge about the name of the person or business that is being checked. No matter what the outcome of the name check, the decision on whether to proceed with a payment will always rest with the sending customer - with the risks made clear if they choose to go ahead after receiving a non-match.

Paul Horlock, chief executive, Pay.UK, says: "Sending a payment with an incorrect sort code or account number is like addressing a letter with the wrong post code. Even if you have used the correct name it won’t reach the intended destination - and fraudsters have become increasingly sophisticated in using this to trick people into sending money to the wrong account.

"Confirmation of Payee will let you check you have the correct name for the person or business you’re paying, giving better protection against certain types of fraud, and helping to stop accidental mistakes too."