You have likely heard that NZ retail banks are introducing changes to help combat fraud. NZ’s retail banks are in the process of implementing a Confirmation of Payee service as part of their payment processing systems.
The Confirmation of Payee service checks that the account holder name you enter when making payments to that payee matches the account holder name registered with the recipient’s bank. The system aims to reduce errors and help to prevent scams such as invoice redirection fraud, where payments are made to a third party’s account.
Banks started rolling out the service at the end of November 2024 and should have the service in place for personal customers of participating banks by Easter. The service is expected to be rolled out to business banking platforms later in 2025, and your bank should contact you about what to expect.
WHAT PAYMENTS ARE CHECKED?
The service applies to new online and app domestic payments only. Existing saved payments, international payments and same day cleared payments will not be checked. Nor will banking app registered payees such as Councils and power companies.
WHAT DO YOU NEED TO DO?
For businesses, the new service means ensuring that payment systems, invoicing processes, and internal policies align with the new requirements. Action points include:
- Communicate with your customers: Let your customers and other payees know your correct account holder name and account number to ensure you get paid.
- Update your documentation: Check your invoices, payment requests, website, internet marketplaces etc. have your correct account holder name and number on them. For companies, your account holder name should be your legal company name (not your trading name) but check with your bank if you are unsure.
- Update your processes: Update your processes to cover any necessary changes.
- Train staff: Educate your team, particularly those responsible for accounts payable and payments, on how to use the Confirmation of Payee service, your new process, and importance of them.
- Capture correct payee Information: Ensure that you obtain the correct account holder name and bank account number for new suppliers, staff, and contractors etc. to avoid payment delays.
This new service is a timely reminder to stay vigilant against fraud.
JR’s account holder name
Our account holder name is “Jackson Russell”.
FURTHER INFORMATION
For further information, please see your bank’s website or communication about the new service, or see the service provider website, getverified.co.nz.