What is a common technique used to mitigate fraud in Faster Payments?

Confirmation-of-Payee (CoP) is a valuable technique used to mitigate fraud in Faster Payments by enhancing the verification process involved in payment transactions. This method ensures that the person receiving a payment is indeed the intended payee. When a sender initiates a payment, CoP facilitates a verification step where the payment details are checked against pre-defined information about the payee, such as their name and account number. If there is a discrepancy, the sender is alerted, reducing the chance of misdirected payments and fraudulent activities.

The effectiveness of CoP lies in its proactive approach, allowing individuals and businesses to confirm that their funds are going to the correct recipient before the transaction is completed. This significantly diminishes the risk of scams, such as impersonation fraud, where a malicious actor poses as a legitimate payee. By incorporating CoP, Faster Payments systems can foster a safer environment for online and peer-to-peer transactions, safeguarding users from potential losses due to fraud.