Choice International provides a range of payment-related services to regulated financial institutions, including cash or card payment clearing, international payments and foreign exchange services across 200+ currencies.

In an effort to broaden their correspondent network, Choice International have identified ClearBank as their preferred UK agency banker in support of their Sterling-related business activity.

By leveraging ClearBank’s ‘Banking as a Service’ offering, Choice International and its customers will be able to enjoy a much-improved and truly real-time payments experience across CHAPS, BACS and 24x7x365 Faster Payments.

ClearBank’s state-of-the-art banking platform provides regulated financial institutions in the UK and EEA access to a wide-range of API-based banking and real-time payment services.

Nicholas Bridges, CEO, Choice International, said:

“Choice’s business model is fairly unique, as are the bespoke and leading-edge operational and risk management IT systems created to safely manage our flows, working in an increasingly bank de-risked environment.

We searched for an ideal UK banking partner for over five years, with limited success, one that would understand our business model as well as our needs and one which would provide direct access to vital GBP payment systems. We found ClearBank to be open to Companies with non-traditional, innovative and sometimes complex methodologies, and willing to devote the time and resources necessary to understand these in order to move ahead with on-boarding, integration and deployment.

ClearBank’s “Banking as a Service” is able to seamlessly integrate GBP flows, both inbound and outbound, via UK payment schemes, into our own enterprise IT System, delivering faster crediting times and instant execution of payments, for an overall vastly improved value flow and customer experience.

Our having obtained such facilities with ClearBank has made a world of difference to us, and our company now enjoys unbiased, fast and precise access to GBP payment schemes via a direct member. This stands in stark contrast with our former indirect access model, where other clearers’ idiosyncrasies and limitations were unnecessarily pushed down on us, negatively affecting our ways and means, yet we were forced to accept these as ClearBank had not yet launched. How refreshing it has been ever since!

We envision a brilliant future together with ClearBank, where we can carry on innovating and growing, knowing that we have a long term and strong partner supporting us and always adapting to our changing needs.”

Charles McManus, CEO of ClearBank:

“It is a pleasure for us to announce this partnership with Choice International. We have been actively engaged with their executive team ever since we formally opened for business, and we are therefore delighted to finally have them onboard. We look forward to working closely with Choice International to ensure they derive full value from our Banking as a Service offering, with a key focus on enriching the end-customer payment experience”.

This is the fourth blog out of eight in our series on the Contingent Reimbursement Model code (“CReM”) that purports to offer customers strong protection against certain types of Authorised Push Payment Fraud, or “APPF”.

We made the point in Part III that firms demanded Name + Sort Code + Account Number as mandatory information for instructing payments through the eBanking services that provide the seed bed for APPF, and that firms should be held to executing the payment on the basis of all this information, and not just the Sort Code + Account Number.

It would surely follow, even if it is not explicitly stated in the 2017 Payment Services Regulations (the “PSRs”), that the firms, having demanded the mandatory information before entering into the contract to make the payment, have the responsibility for ensuring that the payment is executed through a mechanism that guarantees the validation of that information by the beneficiary firm before the amount is credited, or else, if they cannot guarantee that, the firm bears the risk of incorrect application of the money.

The sending firm chooses the mechanism through which it sends the payment. If the mechanism does not support the validation, then the payer must have a blanket indemnity against incorrect application. The payer has this for cheque payments, thanks to the crossing “Account payee”: if a firm allows the cheque to be paid in to an account with different naming than the payer has stated in the payee line, the firm is liable to the payer for its mistake.

The range of possible outcomes for a “push payment” should be:

The “information” correlates to an account at the beneficiary firm and the payment amount is credited to that account; or The “information” does not correlate to an account at the beneficiary firm and the payment amount is returned, and re-credited to the payer; or The “information” does not correlate to an account at the beneficiary firm, but the beneficiary firm wrongly credits it. When this comes to light the beneficiary firm first returns the payment and it is re-credited to the payer. Then the beneficiary firm, separately and at its discretion, will try to get the money back from their account-holder, but whether they can or not has no impact on their obligation to return the payment, and has no effect on the payer.

The 2017 PSRs are the law now, and these matters need to be tested in the light of them. There is a disconnect between the assumptions behind the PSRs as we read them (that firms will check the “information” and behave as set out above in the case of a mismatch) and how UK “push payments” are processed in practice.

The CReM code accepts the way in which UK “push payments” are processed in practice as a given, and this serves to undermine the protection that the PSRs were, in our view, intended to give the customer – and not just the customers in-scope of the CReM but all of them.

The real solution to “wrong name” APPF is for firms to re-gear their IT infrastructure and payment schemes to validate the name. Indeed, the proposed Confirmation of Payee service has been designed by Pay.uk to validate the name. So, if it can be done through this service, why cannot it be done on every payment and without the need to build a new service?