Until the October 2025 SEPA regulation, euro transfers in Europe were routed by IBAN alone. Banks relied solely on the code, with no name checking. SEPA was designed for quick, uninterrupted, and cheap transactions.
The problem arises when criminals start to replace a supplier’s IBAN on an invoice – the bank account number is what ultimately determines where the money goes.
It could be done in many ways – for example, an email from a business partner announces they changed banks and provides “new bank details,” and of course waits to be paid.
This is a so-called authorized push payment fraud, where the victim approves the transfer personally, so the payment looks legitimate to every system involved.
The answer to this issue was the Instant Payments Regulation (EU 2024/886) – it introduces Verification of Payee (VoP) in the EU payment market.
Now, when you enter an IBAN and the recipient’s name for a transaction, the bank checks whether the details match the actual account holder before you proceed to send money. It’s a simple fraud-prevention tool, but under the hood, there’s an ongoing SEPA bank account verification process that must be completed in seconds.
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The Verification of Payee EU Mandate (October 9, 2025)
The legal basis is Regulation (EU) 2024/886, known as the Instant Payments Regulation (EU 2024/886) or IPR, and adopted in March 2024. The goal was to make euro instant payments available everywhere in Europe, but it also backed this with payee checks for all euro transfers, not just instant ones.
The October 9, 2025 SEPA regulation deadline is when the check became compulsory. EU countries that do not use the euro have a later implementation deadline of 9 July 2027.
Here is what the Verification of Payee EU Mandate requires:
Who must comply: every payment service provider (PSP) in the euro area that offers euro credit transfers, including banks, payment institutions (PIs) and electronic money institutions (EMIs). Unlike the instant payment duties, the payee check had no phase-in for euro-area EMIs and PIs.
Which payments: SEPA Credit Transfers (SCT) and SEPA Instant Credit Transfers (SCT Inst).
Price: free of charge to the payer.
Outside the eurozone: PSPs in non-euro EU countries have until 9 July 2027.
Rulebook: the European Payments Council (EPC) published the scheme rulebook that providers use to talk to each other. It entered into force on 5 October 2025, four days before the legal deadline.
Key benefits of the EU VoP Mandate
Fewer typos and misdirected payments. Cross-referencing the recipient’s name with account records catches simple user mistakes before the transfer is processed.
Invoice fraud caught before the money leaves. When fraudsters tamper with an invoice to insert their own IBAN under a legitimate supplier’s name, the system flags the mismatch immediately, allowing you to stop the payment before funds leave your account.
One standard across the euro area. The same scheme rules and result types apply, no matter which provider you use.
VoP was meant to prevent typos and fraudulent IBAN swapping. But if fraudsters somehow convince the victim to send money to their account under their own name, Verification of Payee wouldn’t help prevent payment fraud in SEPA.
How Verification of Payee works in practice
Behind the scenes, SEPA bank account verification takes a few seconds and follows three steps:
The payer enters the recipient’s IBAN and full name. For business payees, the payer can use a VAT number or Legal Entity Identifier (LEI) instead of the name.
The payer’s payment provider sends a secure, instant query to the payee’s bank.
The payee’s bank compares the details with its records and returns a result.
Put simply, before transactions, banks exchange account numbers, business VATs, and account holders’ names.
Understanding the 4 standard VoP check results
There are effectively 3 verification results: VoP match, close match, and no match. The fourth result is reserved for any possible technical errors.
Match: the name and IBAN correspond. The transfer can go ahead.
Close match: a small difference, such as a typo, a missing word, or an abbreviation. The payer sees the name on file and decides whether to correct the entry.
No match: the name does not match the registered owner of the IBAN. Full Stop. The sender will get a pop-up with a warning.
Verification is not possible: a technical error, the recipient’s provider is not reachable through the scheme, or the recipient doesn’t exist in the base. Usually, this means a typo and a non-existent number; in rare cases, verification isn’t possible at the moment because of technical issues.
The check is a warning; the sender can still pay whoever they want, at his own risk. In this case, VoP effectively says: we do not recommend this transaction; if you proceed, any loss of funds will be completely your responsibility.
Verification of Payee at Genome: protecting your business
We at Genome are fully aligned with European industry standards. In October 2025, we rolled out VoP for SEPA transfers for both personal and business wallet users. It is free and requires no setup: update the Genome app if you haven’t, and the check runs when you enter beneficiary details, before you confirm the payment.
How does it work? Verification of Payee compares the name you type with the name registered on the recipient’s account.
Benefits of using Genome for verified SEPA transfers
Lower risk of losing money. If someone gives you account details that don’t match the recipient’s name, Verification of Payee warns you before you send the transfer. This can help you avoid mistaken payments, which are often difficult to recover.
Safer B2B payments. Solution for a common fraud scheme: “you got an email from a business with new ‘updated bank details’”. Our VoP will verify those details against the receiving bank’s records and issue a clear warning if they don’t match.
Regulatory compliance. Genome is licensed and supervised by the Bank of Lithuania, a modern financial hub of Europe for neobanks, and we strictly follow all the regulations. VoP is yet another tool we implemented to keep our clients secure.
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How businesses should adapt to VoP requirements
Verification of Payee is only as good as the data behind it. For example, “Ltd.” versus “Limited.” – yes, they are two separate entities in banking data, even if it doesn’t make sense.
The rulebook for VoP sets only minimum matching rules, so each bank’s algorithm, in theory, can return a different answer for the same name. Trade names are a weak spot too.
This is currently a problem for SEPA bank account verification, but the European Payment Council is working on it and planning Rulebook 2.0, planned for the end of November 2026.
But before it is fixed, here are the three most important points of risk:
Internal vendor databases. Store each supplier’s registered legal name exactly as it appears in their bank records, not the brand they sell under. Add VAT numbers where you have them.
Review invoicing details. State your company’s legal name, IBAN, and VAT number clearly on outbound invoices. Your customers are covered by the Verification of Payee EU Mandate too, and consumers cannot opt out, so a name that differs from your bank record may create a problem.
To-do algorithm. Decide in advance what happens on a VoP match, close match, and no match result, and who can or cannot override a warning.
Or you can just skip it.
Business payers may opt out of the check on bulk payment files, and many do. Yes, this is legal. For example, in Deutsche Bank’s data, about 80% of SEPA credit transfer files sent over EBICS still opted out in January 2026.
The main purpose of VoP is to prevent payment fraud in SEPA, particularly when criminals replace a legitimate supplier’s IBAN with their own account details. If your business model isn’t as threatened by this, you can use bulk payments, and it will work well for you.
FAQ
Is Verification of Payee mandatory for all transfers in Europe?
Yes, for euro transfers. The October 9, 2025 SEPA regulation deadline made it mandatory for all euro-area PSPs offering SEPA Credit Transfers and SEPA Instant Credit Transfers. PSPs in non-euro EU countries have until 9 July 2027.
Does Verification of Payee block my transfer automatically if there is a “No Match”?
Not in most cases. It works as a warning system. You see the result and can proceed, cancel, or re-verify the details with the recipient. Proceeding after a “No Match” warning can affect liability if the payment turns out to be fraudulent.
Is there a fee for using Verification of Payee on Genome?
No. EU rules require the service to be free for the payer, and Genome does not charge for it. You do not need to enable anything.
Does Verification of Payee work for SWIFT transfers?
No. It applies to euro SEPA transfers. International SWIFT payments are outside the European payment system, so verify those recipients by other means.
Or just open a Genome business wallet to send SEPA transfers with the payee check already running.
