Starting October 9th, all SEPA Credit Transfer transactions will require prior Verification of Payee (VoP). This regulatory change means that PSPs need to be prepared to handle an increased volume of verification requests efficiently and reliably, in line with new Instant Payments Regulation.
Essential milestones
The introduction of the Verification of Payee (VoP) requirement is driven by the Regulation on Instant Payments (IPR), which mandates enhanced security measures for payments within the European Union. Under this regulation, all Eurozone Payment Service Providers (PSPs) must implement VoP capabilities by October 9, 2025. This requirement aims to improve the accuracy of transactions and strengthen consumer protection in the evolving digital payments landscape.
The VoP scheme is designed to enhance security and transparency in payment processes across the Single Euro Payments Area (SEPA). Developed by the European Payments Council (EPC), the scheme establishes a standardized set of rules, practices, and technical specifications for PSPs to follow. By verifying the recipient’s details before executing a payment, the scheme helps prevent misdirected transactions and reduces fraud risks.
To enable seamless operation, the VoP scheme relies on a centralized repository known as the EPC Directory Service (EDS), which stores all Routing Verification Mechanisms (RVMs) endpoints. Since October 2024, a standardized API specification has been in place to ensure interoperability among financial institutions. SWIFT has been selected as the EDS supplier to ensure a reliable infrastructure for managing payment verification across SEPA.
The EDS is being implemented in a phased approach to ensure a smooth rollout. The pilot phase began with a limited number of RVMs participating in May and June. This will be followed by a full-scale deployment in July and August, involving all relevant stakeholders. By progressively integrating all players, the EPC aims to refine the system and address any technical or operational challenges before full adoption.
The primary goal of VoP is to combat fraud and reduce manual payment errors. Fraudsters often exploit misdirected payments to deceive individuals and businesses. By ensuring that the recipient’s details are validated by the payer, before a transaction is processed, VoP significantly reduces the risk of fraudulent activities.
Worldline RVM solution 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.
What stands Worldline RVM apart:
Example of an possible end-user experience with Verification of Payee (VoP) as part of the Online Banking app” right below the title “User Experience.
Account holder data base capability
To reduce core baking system integration burden, the Worldline solution can support PSPs in their responding role by providing cloud data base to store the relevant account holder data. This data will be used directly by our matching algorithm to accelerate the answer in real time.
Advanced name-matching capability
Our name-matching capability does not only comply with the EPC’s recommendation, but goes beyond with 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).
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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