New guide aims to prevent consumers' online payment errors

Source: Payments UK

A new guide offering consumers advice on how to avoid making errors when sending electronic payments has been published today (Wednesday 8 June 2016) by Payments UK, the trade association for the payments industry.

The new guide, published as part of Payments UK’s Pay Your Way consumer advice campaign, explains how to make electronic payments correctly, how to prevent mistakes from happening and what steps customers can take if they mistakenly send a payment to the wrong account.

Electronic payments, such as mobile and online banking payments, are addressed using just the sort code and account number. Yet new research conducted for Payments UK1 found that more than half of people (55%) incorrectly believe the recipient’s name is checked, a further 15% think the recipient’s debit card number is used and just over one in twenty (6%) even believe their post code is checked.

Top tips to prevent errors when sending payments:

· Double check

Always double check the sort code and account number when sending a payment.

· Check the reference

This is particularly important if you are paying a business.

· Can you use Paym?

Paym lets you check the account holder’s name before confirming the payment.

· Long lost friend?

How long it is since you last paid that payee – do they still use the same account?

· Stay up to date

Review your payee lists regularly and delete any you know are no longer being used.

· Send a test

Remind the person you are paying to double check the details they provide. For extra reassurance, you could send a low value test payment and check the funds are received.

The updated consumer advice is based on insight gained from independent user experience research carried out by specialist digital consultancy Adaptive Lab. Two phases of user research were carried out which observed customers in a live environment entering payment information to examine how the design of online and mobile banking channels can influence rates of error.

Payments UK is also leading work that has highlighted a potential longer-term solution to the issue of payments being sent in error. The World Class Payments project has recommended that the development of a ‘Confirmation of Payee’ capability2 across the industry should be a priority as it would further reduce the risk of errors when making electronic payments. Payments UK’s World Class Payments work was undertaken to help inform the Payments Strategy Forum, set up by the Payment Systems Regulator, to set strategy for the industry. They are expected to publish their recommendations this summer.

The continued popularity of internet and mobile banking payments is demonstrated by results from Payments UK’s National Payments Study. In 2015, more than two out of three account holders (69%, up 5% from 2014) used online banking to manage their current account, while mobile banking services (typically through an app) were used by one in three (up 4% from 2014).

Maurice Cleaves, Chief Executive of Payments UK, said: “The ability to send an electronic payment 24 hours a day, seven days a week is something that has become second nature in the UK. Although the overwhelming majority of payments are sent to the correct destination – we hope our new research and advice will hammer home the importance of using the right account sort code and account number.

“This new guide, taken together with the recently introduced industry-wide processes to help recover payments and the work looking to design out the issue in future, is the latest positive development in tackling this issue.”

Payments UK’s work on the prevention of payments in error follows on from other recent industry improvements to help customers attempt to recover payments. The UK’s main electronic payment schemes, Faster Payments and Bacs, have implemented industry-wide timescales and procedures for banks and building societies to follow when attempting to help customers recover payments that have been sent in error.

The enhancements to the recovery process, introduced in January 2016, mean that in straightforward cases where there is clear evidence of a genuine mistake, money can be returned within 20 working days where the recipient does not dispute the return of the funds.

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