The central banking system of the Eurozone is set to introduce a Verification of Payee (VoP) service for payment service providers (PSPs) within the Single Euro Payments Area.
Under the EU Instant Payments Regulation, PSPs will be mandated to provide this VoP service for euro credit transfers. This regulation aims to ensure that payers are alerted to any discrepancies between the payment account number and the intended payee’s name. Depending on the outcome—whether it is a ‘match’, ‘close match’, ‘no match’, or ‘other’—payers can make informed decisions about whether to proceed with the payment.
Since August of last year, the Eurosystem has been exploring VoP, leveraging solutions developed by Banco de Portugal and Latvijas Banka in line with the VoP scheme established by the European Payments Council.
The implementation of the VoP service is anticipated to mitigate the risks of fraud and payment errors by allowing payers to confirm account details of recipients prior to initiating transactions. Coordinated by the Eurosystem and utilizing the Portuguese and Latvian VoP frameworks, this service will be available for instant payments, including those settled through Target Instant Payment Settlement, as well as for SEPA credit transfers.