Is it safe to pay by bank transfer?
Bank transfers are safe when used with verified recipients, but carry a higher fraud risk than card payments because they are harder to reverse. The Payment Systems Regulator’s (PSR) mandatory reimbursement scheme — effective October 2024 — now requires UK banks and payment firms to reimburse most victims of Authorised Push Payment (APP) fraud up to £85,000. This significantly strengthens consumer protection for bank transfer payments.
What is APP fraud and how does it relate to bank transfers?
Authorised Push Payment (APP) fraud occurs when a criminal tricks someone into sending a bank transfer to a fraudulent account — for example, by impersonating a solicitor, builder, or HMRC. Because the victim authorises the payment themselves, it has historically been harder to recover than card fraud. The PSR’s October 2024 reimbursement rules now place equal responsibility on both the sending and receiving bank to prevent and reimburse APP fraud.
How can I protect myself when making a bank transfer?
Always verify account details independently — call the recipient on a number you have sourced yourself, not one provided in an email or text. Use Confirmation of Payee (CoP), which most UK banks now offer, to check that the account name matches before sending. Never transfer money based solely on instructions received by email, as business email compromise is one of the most common APP fraud vectors.
Open Banking in Practice: Open banking payment initiation via PISPs adds a layer of protection: FCA-regulated PISPs are required to implement fraud screening and Strong Customer Authentication before initiating any payment. The PSR’s APP fraud rules apply equally to open banking-initiated payments. For large transfers — particularly property completions — always use CHAPS with direct verification from your solicitor. Read our guide to safe payments on openfuture.world.
FAQ
What is Confirmation of Payee and how does it work?
Confirmation of Payee (CoP) checks the account holder’s name against the sort code and account number you enter, alerting you if there is a mismatch before you send.
Can I get a refund if I send a bank transfer to the wrong person?
You can ask your bank to attempt a recall, but it is not guaranteed; under the PSR APP fraud scheme, fraud victims can now claim reimbursement up to £85,000.
Is paying by open banking safer than by card?
Open banking payments use bank-grade authentication and are subject to PSR fraud protections; neither is inherently safer — both carry different risk profiles.