Bank account name matching "coming soon" when making a payment?

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Forums › Finance and wealth management › Bank account name matching "coming soon" when making a payment?

ANglEAUT

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#312798 17-May-2024 23:10

This is a tangent of the Banks responsibility for fraud detection thread.

@SATTV: The bank can not see who's name is on the bank account locally ( this is coming this year I believe and if the names don't match it wont go through ) ...

@larknz: Even when account names are visible to the bank it will only be for NZ accounts ...

Does anyone have more info on how this is supposed to work? Where & how will it verify/match the name & warn me, as the person sending out the money?

If Joe Bloggs does painting work for me & I save his account details as payee Painter Joe, what will break?

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Smpl Mnmlst
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#3232006 18-May-2024 03:58

Yes - this whole thing is going to be very interesting. On one hand it’s totally necessary given the current loose system. OTOH, given that 99.999% of current funds transfers are fine, you wonder if it might be more hassle than it’s worth - for all parties.

If it’s going to completely effective, the name of the payee will need to be an exact match for the way that name is recorded by their bank. eg as you say, is it A B Smith Limited or AB Smith Ltd?

For regular and recurring payments this is unlikely to be an issue. It’s likely that it’s with one-off payments where fishhooks may arise.

In our case, we have a joint account. In various places BNZ themselves show it as:

AB & CD Smith
AB Smith and CD Smith
Alpha Bravo Smith and Charlene Delta Smith
Mr AB & Mrs CD Smith
SMITH, ALPHA BRAVO & CHARLENE DELTA

I don’t know which is the correct legal version of the account name - so I don’t know which version I would have to give to a payer. Banks may have to start making it very clear to customers the exact form of their account name.

What happens if a payer doesn’t get the payee’s name exactly right? If the payment is rejected, how long will it take for the payer to be notified? Probably instantaneous for domestic electronic transfers. The current system checks that the payee account number is an account that actually exists at a NZ bank and if not, the instruction is rejected. So that check could just be extended to cover account number and name. But what if it’s not an online payment?

Then, if any payment is rejected because the name doesn’t exactly match, the payee is going to have to contact the payee to confirm the correct form of the name. That may take 24 hours - so what happens in the case of time-critical payments?

Maybe I’m overthinking all this and the banks have it all under control - or maybe this is just the tip of the iceberg. In general I have little sympathy for banks but I’m sure they’re right when they say this is a difficult thing to implement. All the above is mainly for domestic payments - imagine the exponential difficulty with international payments.

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mudguard

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#3232087 18-May-2024 14:00

God it will be nightmare. I hope it's not going to be implemented. You'll have a small typo and the payment will simply be rejected.
My partner is from Scandinavia so uses her middle name as her first name. But all her legal info is in her full name.
Some account will name will have Ltd, or perhaps Limited. And it will just get rejected if it's wrong.

eracode

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#3232089 18-May-2024 14:13

mudguard: God it will be nightmare. I hope it's not going to be implemented.

I’m sure the banks have said it will be implemented later in the year - for domestic transfers anyway.

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cruxis

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#3232094 18-May-2024 14:44

Maybe some sort of toggle , a tick a box option where one can enable/disable name matching on a transaction they make.

Eva888

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#3232096 18-May-2024 14:46

Fine if you are a Mr Smith but imagine the hell when surname is Mr Albuquerque, or Mr Philipps is that one P or two etc. Will they charge a levy to people with difficult handles for the extra work they will cause.

On the plus side, banks will need to hire more staff to fix the daily mess ups and, so…maybe won’t be implemented?

solaybro

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#3232145 18-May-2024 15:11

In the UK, when you initiate a payment, you enter the recipient's name along with their account details. The system then performs an immediate check and informs you of the match status. There are three possible outcomes: an exact match, a partial match, or no match. Based on this feedback, you can choose to proceed with the payment, amend the recipient's details, or cancel the transaction.

johno1234

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#3232147 18-May-2024 15:46

This is also part of upcoming ISO 20022 Bank Payment standardisation. It is more prescriptive compared to current formats especially around names and addresses and will be a bit of work for larger organisations with large numbers of payees.

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ezbee

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#3232148 18-May-2024 15:48

I suppose we don't have data on the number of times people misstype a 0-8-6-9 or 3-5 etc?
Small screens getting old and stuff.
Payment then sloshing off to somewhere-else.
Bank then needs to chase up somewhere-else when customer requests they try to get it back.
Then all the hassle of dealing with somewhere-else who may not be helpful.
Finders Keepers.

Scammers may have more risk with name matching.
While international this may not help, those using local mules may be limited in claiming they are legit company names.

If other countries do it?

Behodar

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#3232150 18-May-2024 15:57

This sounds like a nightmare waiting to happen. I don't use my legal name, and many of my friends don't even know it. Ideally I'd be able to add my nickname as an "alias" to my account, but who knows whether anyone at the banks thought of that...

SirHumphreyAppleby

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#3232154 18-May-2024 16:11

Behodar:

Ideally I'd be able to add my nickname as an "alias" to my account, but who knows whether anyone at the banks thought of that...

Multiple aliases and the ability to add/change them at will would also be good. If people can 'be what they want to be', I may want to call myself 'Spark NZ' one day and 'One NZ' the next. It's not for the banks or anyone else to tell me otherwise.

rugrat

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#3232160 18-May-2024 16:54

Wonder if they will apply it to payees already set up in internet banking. If has to be an exact match probably most of mine will fail, Ltd vs Limited, case sensitive that sort of thing, is there a full stop after Ltd.

When setting up a new one instant feedback for name match would be good, that would mean a data base of all account names and numbers somewhere, or banks would need instant communication between each one. Where payments take up to two hours when paying a different bank at present so suggests communication is not instant.

nickb800

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#3232223 18-May-2024 17:49

Not sure how they are proposing to do it, but in my mind, they just need to show the name of the account that I entered the account number for (perhaps on the confirmationpage), and let me decide whether it is a close enough match or not.

Dunno if that would fall foul of privacy rules though

PolicyGuy

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#3232229 18-May-2024 18:36

ezbee:

I suppose we don't have data on the number of times people misstype a 0-8-6-9 or 3-5 etc?
Small screens getting old and stuff.
Payment then sloshing off to somewhere-else.
Bank then needs to chase up somewhere-else when customer requests they try to get it back.
Then all the hassle of dealing with somewhere-else who may not be helpful.
Finders Keepers.

This is not usually a problem.

Bank & branch codes are edited against a table of valid combinations.
There is a complex check digit calculation on bank-branch-account that makes fat fingering a valid combination very unlikely.
I once wrote code to validate bank account numbers, so I used to know how it worked

What this prevents id some scumbag giving you the wrong but valid account number so your money goes into a crook's bank account instead of the person you thought you were paying

cokemaster

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#3232231 18-May-2024 18:54

In Australia, they have the concept of Pay ID which links your mobile number or email address to your account.
When you set it up, you have an option of what to present to others. Eg. If your name is John Doe, you could choose to present it as John D, J Doe, John Doe etc. For companies - it shows their name.

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rugrat

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#3232239 18-May-2024 20:05

PolicyGuy:

This is not usually a problem.

Bank & branch codes are edited against a table of valid combinations.
There is a complex check digit calculation on bank-branch-account that makes fat fingering a valid combination very unlikely.
I once wrote code to validate bank account numbers, so I used to know how it worked

What this prevents id some scumbag giving you the wrong but valid account number so your money goes into a crook's bank account instead of the person you thought you were paying

If the account number is valid, won’t it pass the checks? The account has to be a real one for the crook to receive it.

It would make more sense to reduce risk of a genuine mistake of typing in wrong number, or misreading a number to put in.

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