The specifications are based on the proposal of the European Payments Council’s VOP Scheme Rulebook.

The solution will leverage building blocks of its recently launched Fraud Pattern and Anomaly Detection (FPAD) functionality to provide a comprehensive IBAN/name matching solution with a broad reach across SEPA starting from December 2024. The delivery will be completed 10 months before the October 2025 deadline set by the Instant Payments Regulation, when the obligation for payment service providers (PSPs) in the eurozone to provide a Verification of Payee service to their customers will come into force.

FPAD is an integral part of the pan-European retail payment systems STEP2 and RT1 and has been available since March 2024. FPAD provides the users of both services with a wide range of real-time fraud prevention and detection tools. The functionality already allows PSPs to conduct beneficiary name verifications before a payment is sent. With the December 2024 delivery, this functionality will be enriched with the EPC VOP Rulebook requirements.

PSPs will have different options to leverage the comprehensive Verification of Payee capabilities of FPAD, both on the requesting and responding side. This will allow PSPs to adapt their approaches over time, whilst ensuring full pan-European reach from the start. Using the FPAD capabilities also enables PSPs to address risk considerations and limit friction for end users, in addition to fulfilling compliance requirements.

Olivier Jolyon, Head of New Initiatives at EBA CLEARING, said:

“We have delivered the Verification of Payee user specifications as planned and are on track to bring the solution to STEP2 and RT1 Participants before the end of 2024. This will allow our users to get a head start on preparing for regulatory compliance. At the same time, the different options provided by FPAD allow PSPs to address their wider fraud-fighting needs and further strengthen customer experience and safety.”

Erwin Kulk, Head of Service Development and Management at EBA CLEARING, said:

“For our users, the issue at stake is to create friction in the customer journey where it is needed for the sake of fraud prevention and to avoid it where it is not needed. By combining scheme-compliant Verification of Payee checks with other FPAD indicators and with their own individual insights, PSPs will be able to remove doubts associated with a beneficiary account in order to prevent fraud. At the same time, they can also benefit from the power of the network view provided by FPAD to minimise friction for legitimate payments.”