Verification of Payee: enhanced trust and security
The Verification of Payee (VoP) obligation was introduced in the Instant Payments Regulation and will be applicable as from 9 October 2025. This requirement imposed on payment service providers is all about checking whether the name and payment account identifier of a payee match, or not.
An obligation for all types of credit transfers
With the advent of instant payments, industry experts foresee a significant rise in fraud, but also in honest mistakes which would lead to money being instantly transferred to the wrong bank account. To tackle this key issue for PSPs and payment service users (PSUs), the EU has imposed a mandatory beneficiary name-account details matching service before processing an instant payment. But it goes even further than IPs: VoP is to be implemented for any type of credit transfer, through all channels, from app and web to counter and automated teller machines.
The important project scope and the challenges in terms of user experience and connectivity make it difficult for PSPs to implement a VoP service. Moreover, it has to be done in parallel with other significant projects: being able to receive IPs by 9 January 2025, and send them by 9 October 2025. The latter date corresponds to VoP.
What’s in it for credit institutions and final users?
The VoP process brings significant benefits to both PSPs and PSUs: it enhances trust, security, and efficiency in credit transfers.
On the PSPs’ side, VoP helps reduce errors and fraud, fostering a reputation for reliability while providing a competitive edge through faster response times and seamless payment experiences.
PSUs benefit from the increased safety of verified credit transfers, as VoP ensures the beneficiary’s name and account details align, reducing the risk of fraud or mistakes. They will therefore be able to take informed decisions before processing a credit transfer. It is also important to note that if a PSU proceeds with a payment despite a “no match” result, he/she bears responsibility for any errors, whereas following a “match” result ensures funds are securely and instantly transferred to the correct account.