Verification of Payee: A Key Step Toward Safer Instant Payments in Europe

2025 06 11 · 5 min read

As Europe moves closer to full adoption of real-time euro payments, the Single Euro Payments Area (SEPA) continues to serve as the foundation for faster, more integrated transactions across the region. With upcoming regulations set to make SEPA Instant Payments mandatory, the focus is shifting from speed to security. This is where Verification of Payee (VoP) plays a critical role – ensuring that money moves not just quickly, but correctly, by verifying that the recipient’s name matches the account details before a payment is completed. 

SEPA: The Backbone of Payment Integration in Europe 

SEPA is a European Union’s initiative that simplifies euro-denominated bank transfers across participating countries. It enables consumers, businesses and governments to make and receive payments under the same basic conditions, rights and obligations, regardless of their location within the SEPA zone.

With SEPA, cross-border payments are processed just like domestic payments. This uniformity has not only improved efficiency but also paved the way for innovations such as SEPA Instant Credit Transfers (SCT Inst), which are transforming the payments ecosystem across Europe. 

SEPA’s strength lies in interoperability and harmonised standards, making it a secure and reliable system for all participants. The introduction of VoP further enhances this by adding a name-checking layer, boosting security without sacrificing simplicity or speed. 

What Are SEPA Instant Payments? 

SEPA Instant Payments, formally known as SCT Inst, are a real-time payment scheme launched in 2017 by the European Payments Council. Unlike traditional SEPA transfers, which may take up to one business day, SCT Inst transactions are processed within 10 seconds, 24/7/365, including weekends and holidays. 

These instant payments have been gaining momentum, but uptake has varied across EU member states. To address this, the European Commission introduced legislation to make SCT Inst mandatory for euro payments across the EU. From October 2025, all banks and PSPs offering SEPA Credit Transfers will also be required to support instant payments. This regulation also includes provisions to mandate the implementation of VoP for instant euro transactions. 

Get in touch with our financial institutions consulting team to discover how it may affect your operations. 

What is Verification of Payee (VoP)?  

VoP is a security check designed to prevent fraud and misdirected payments by confirming that the name of the payee matches the account number before a payment is made. This sounds simple but it is a powerful tool in reducing scams and errors – especially in the age of instant payments.  

What is the Process of VoP Scheme?  

At its core, VoP checks whether the account holder’s name matches the account number (IBAN) provided by the payer. When initiating a payment – especially SEPA or instant payments – the payer’s bank (or PSP) sends a query to the payee’s bank to confirm if the name and IBAN are aligned.  

There are different ways this is technically implemented (centralised vs. decentralised models), and the Verification of Payee rulebook developed by the European Payments Council (EPC) helps to ensure interoperability and consistency across the EU.  

How Does VoP Work for Individuals and Companies?  

For individual users, VoP can help prevent common scams such as invoice fraud or social engineering attacks. Imagine being warned that the account you are about to send money to does not match the recipient’s name – that’s VoP in action.  

For companies, it can bring both protection and complexity. On the one hand, it reduces fraud risks. On the other, integrating VoP into systems and processes – especially at scale – may require IT adjustments, vendor integrations and compliance alignment.  

What Issues Does VoP Create for Corporate Payments?  

Corporates making high volumes of payments (e.g. payroll, supplier settlements) may face operational and technical burdens, such as: 

These challenges require early planning and engagement with solution providers. 

Why Does SEPA Instant Payments Make VoP Even More Crucial? 

In real-time transactions, errors are costly and difficult to reverse. VoP helps prevent misdirected or malicious transfers by verifying the recipient’s name against their IBAN before payment completion. This is vital for corporates and financial institutions operating at scale. Under the new regulatory framework, VoP will be a compliance requirement, not just best practice. Early implementation minimises operational and reputational risks. 

What are the Benefits of VoP for SEPA Payments?  

SEPA has already improved the speed and consistency of payments across Europe. Adding VoP to this framework enhances trust and security – both for senders and recipients. With fraudsters increasingly exploiting instant payment channels, VoP serves as a vital safeguard without slowing down the user experience.  

For financial institutions, implementing VoP can also boost customer confidence and reduce fraud-related costs.  

Why is VoP Important Ahead of the 2025 Regulation?  

The upcoming new regulatory landscape expected this year includes provisions to make VoP mandatory for euro transactions. That means all PSPs will need to support name checking and potentially before the 2025 deadline.  

Early movers will gain a competitive edge by reducing fraud, increasing client trust, and avoiding last-minute compliance scrambles.  

VoP is not just another compliance requirement. It is a strategic opportunity to improve payment security, meet regulatory expectations, and strengthen customer trust. With instant payments, SEPA and SWIFT Verification of Payee all accelerating, there is no better time to prepare, which you can do now with the consultations from our team of experts.