Timely Compliance:
Essential for Avoiding Penalties
- Eurozone banks to receive Instant Payments
- Eurozone PSPs to implement pricing in line with regular credit transfers
- all EU PSPs to implement entity-based sanctions screening
- Eurozone banks to send Instant Payments
- Eurozone PSPs to support Verification of Payee
- Non-Eurozone banks to receive Instant Payments within business hours
- Non-Eurozone PSPs to implement pricing in line with regular credit transfers
- Eurozone non-bank PSPs (PIs and EMIs) to send and receive Instant Payments
- Non-Eurozone non-bank PSPs (PIs and EMIs) to receive Instant Payments
- all non-Eurozone PSPs to send Instant Payments within business hours
- all non-Eurozone PSPs to support payee verification service
The service ensuring verification applies as of 9 October 2025 for eurozone PSPs and 9 July 2027 for non-eurozone PSPs.
The European Commission has mandated that all Payment Service Providers (PSPs) in the Single Euro Payments Area (SEPA) must send and receive SCT Inst transactions. In the Eurozone they have to be able to receive Instant Payments by 9 Jan 2025 and send Instant Payments by 9 Oct 2025. For the non-Euro countries the deadline is a bit longer. This move is designed to enhance the speed and efficiency of transactions while also addressing the potential risks associated with the irrevocability of Instant Payments.
To further support the adoption of SCT Inst, the regulator has implemented measures to limit pricing for the payers to the cost already taken for regular credit transfers, improve the speed of obligatory by simplifying the sanctions screening, and most significantly, introduced a mandatory Verification of Payee.
With this, payer banks are now obligated to verify the beneficiary name against the IBAN even before initiating the credit transfer. This stringent measure is a response to the growing threat of fraudsters exploiting the irrevocability of Instant Payments.
In addition to fraud prevention, the main advantage of the new service will be for the payers because they will get immediate feedback about the correctness of the payment data they have used. This ensures accuracy and minimizes the possibility of errors, saving time and preventing potential complications.
Additionally, Payer reduces the risk of lost funds and eliminates the need for claims with the payment processor, streamlining the payment process and enhancing user experience. Moreover, by fulfilling regulatory obligations and reducing fraud and misdirected payments, financial institutions contribute to a more efficient and secure payment ecosystem.
The time to act is now!
The challenges posed by these new regulatory requirements are significant for banks. Not only must they comply with the mandates within a short timeframe (18 months), but they also face potential financial consequences for non-compliance. Banks that fail to offer the mandatory services may be held liable for any losses incurred as a result, adding urgency to their need for swift implementation. The largest technical challenge is the huge number of affected PSPs that need to be connected with an appropriate interoperability network. The key success factor for such an ecosystem is a high level of standardization and a strict scheme rule set (refer to upcoming EPC VoP scheme).
In response to these regulatory changes, our Worldine Verification of Payee product is positioned to support banks in meeting the new requirements. For payer banks, our product facilitates routing to all European banks, while for payee banks, we provide real-time and proven name matching capabilities.
Worldline Verification of Payee will be crucial in ensuring a smooth transition and enhancing the security of Instant Payment transactions for PSPs. It is offered via APIs and can be used by all payment channels of the PSP like online banking, batch, phone or agent.
The main functionalities of the solution are:
- One API to the European Banks for sending the VoP request
- Routing VoP request from the requesting to the correct responding PSP
- Comparing the provided data with the stored account holder data at the responding PSP by using advanced name matching algorithms
- Send the answer (could be one of three: match, no match, close match) from the responding PSP to the requesting PSP
User experience
Additionally our solution can support banks in their responding role with providing a dedicated cloud database to store the relevant account holder data and handle the incoming VoP requests in real time with the necessary high-availability. This data will be used by our matching algorithm to provide the answer in real time.
Our solution provides access to a large network of beneficiary banks and verifies the match of the beneficiary account holder’s name with the provided name through advanced syntactical and phoentical checks partially based on machine learning. We also support advanced pattern like nicknames, multiple languages, multiple account holders and corporate names. The results can be a clear confirmation (a match), a recommended correction (a close match), or a warning (no match). This enables the payer to review the data provided and make a final decision for the payment.
Take the next step
Staying informed and taking proactive steps to ensure compliance with the new regulatory requirements is essential for all PSPs. We encourage you to explore additional insights on this topic:
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