Verification of Payee: what makes name matching so complex?

This check mainly consists of a matching process between the provided name and the stored account holder name. The payer's PSP is required to verify the IBAN-Name match for the beneficiary. Consequently, the IBAN-Name information supplied by the payer will be forwarded to the payee PSP to be compared against the stored account holder data, which is verified through the established KYC process.

Such checks may sound simple, but you can find many complexities if you look closer. The following list of challenges shows why it is necessary to establish a set of sophisticated algorithms to achieve reliable and correct results.

• Variations in spelling: Names can be spelled differently due to typos, misspellings, or variations in transliteration, especially in multicultural or multilingual contexts.
• Aliases, titles, and nicknames: People often have official titles like “Dr.” or use aliases/ nicknames that may not be directly related to their legal names, complicating the matching process.
• Cultural differences: Cultural naming conventions vary widely, leading to challenges in matching names across diverse cultures. For example, the order of given names and surnames varies between Western and Eastern cultures.
• Missing, incorrect or incomplete data: Incomplete, missing, incorrect or outdated records, duplicates, and inconsistencies can make it difficult to accurately match names.
• Homographs: Names that are spelled the same but have different pronunciations or meanings (homographs) can lead to confusion and inaccurate matches.
• Contextual ambiguity: Names may have different meanings or refer to different entities depending on the context. For example, the name "John Smith" could refer to multiple individuals, making it difficult to accurately match without additional context.
• Cultural biases: Name matching systems may inadvertently exhibit biases towards certain names or cultural backgrounds, leading to disparities or inaccuracies in matching results.
• Name changes: Individuals may change their names due to marriage, divorce, or other life events, resulting in multiple names associated with the same person.

PSPs will need to be able to manage these types of complexities to have reliable IBAN-Name matching capabilities. Some of these obstacles could be solved by activities like data cleaning or usage of additional data sources like nickname list, others will need a more advanced approached like the usage of Artificial Intelligence.

Ultimately, the success of the Verification of Payee service in reducing the upcoming fraud highly depends on the quality of the underlying matching algorithms. And as the deadline quickly approaches, proactive action is essential to ensure both compliance and operational readiness. 

Learn more about how to solve the challenges that name-matching bring and about our reliable algorithm on:

• Our Worldline VoP Developer Portal
• Our Verification of Payee product page
• Contact us form