Payments by reference present recipient

Payments to entities through the Portuguese banking system will now display the name of the recipient from this Monday, transposing a rule from the Bank of Portugal (BdP) that aims to combat bank fraud.

The notice had already been issued in November and, after a period of public consultation and adoption of the changes by the entities involved, it now comes into force. The new functionality will make it possible to identify who is the recipient of a payment, which may be hidden through contracted services .

Among payment companies, the opinion is that this is a very positive measure and something that has been expected for years.

Hipay's general director in Portugal, Eduardo Barreto, said that the measure “should have been implemented a long time ago”. “We see this implementation as very positive. It will improve everything, there are no negative points. The only negative point would be for fraudsters and criminals”, he said, in statements to Lusa.

According to this person in charge, from this Monday onwards “it will be more difficult” to commit fraud through ATMs , since references generated in partner online stores will now be properly identified.

The idea is shared by Ifthenpay co-founder Filipe Moura, whose company also sees the measure “very positively”, adding that it was something that had been requested since the company began operating in 2005.

“Although payments via Multibanco reference have a very low fraud rate, this measure will help to further reduce certain types of fraud — such as, for example, the well-known “Hello Dad, Hello Mom” fraud — as the payer now has direct visibility over the actual recipient of the funds,” explained Filipe Moura.

Eupago's co-CEO Telmo Santos praised the “positive step towards strengthening security in financial transactions”, but called for a balance between security and user privacy.

This is the latest mechanism by the BdP to prevent fraud in the sector, after last year, also in May, a solution came into force to identify the account holder through the IBAN , when making a transfer.

The new functionality will allow identifying who is the recipient of a payment — such as companies —, which may currently be hidden through contracted services, allowing the consumer to understand who they are sending the money to.

Eduardo Barreto considered that the business could even be positively affected because customers “may even prefer to have their name, instead of Hipay’s name”, but explained that both will be visible — both the partner’s and the platform’s.

The opinion is echoed by Ifthenpay, which also considers that the presentation of the two names “also reinforces users’ trust”.

“In case of problems with the delivery of products or services, the payer will know that he can contact Ifthenpay to mediate the process”, says Filipe Moura, adding that “without this visibility, frauds such as non-delivery of goods or services would be more difficult to detect, prevent and stop” .

Eupago, despite admitting that there may be “some impact on brand exposure”, believes that this impact “will not be significant in terms of activity”.

When asked about the costs involved in transposing this standard, the companies considered that they were not very significant, with Eupago pointing out that there are inherent costs such as technological development, testing and monitoring.

Regarding the complaints received, both Ifthenpay and Hipay pointed out that the majority of them are not frauds, but rather people who have forgotten what they paid for.

Overall, the balance is positive, with the three companies welcoming the increase in transparency and the possibility of reducing fraud, such as in cases of phishing or “scams that exploit users’ trust”.