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Payment Reference Information

Direct credits are used by businesses and the Government for a variety of purposes including payroll, pensions, state benefits and trade payments.

Telephone and internet banking are the main channels used by consumers to initiate payments by direct credit, although some banks also allow them to be initiated at cash machines. Consumers use direct credits for purposes such as credit card bill payments and transfers to other individuals.

In some circumstances direct credits are accompanied by reference data, explaining the purpose of the payment or providing other supporting information. Problems can arise if the reference information is entered inaccurately or incompletely, or if it is not fully transported from the initiator of the payment to the end recipient.

As part of the National Payments Plan, work started to address this issue. The aim was to understand where the main problems lie, how big they are and to assess potential measures which could improve the accuracy of reference information.

The review concluded that there is considerable scope to reduce error rates and enhance efficiency during the payment process.

As a result, best practice guidelines for billers and payers have been developed to help limit the likelihood of payers entering wrong reference information. However, there are also some measures banks can adopt to help reduce the frequency of errors. The Payments Council has produced best practice guidelines for this below:

Best Practice Guidelines