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Amendments to the SEPA Regulation (EU) 260/2012 regulating instant credit transfers in euro (Instant Payments Regulation – “IPR”) are slowly coming into force, the next recent date being the 9th of October 2025. The IPR was implemented in 2024 and provides mandatory requirements for payment service providers (“PSPs”) in instant credit transfers made in euro, verification of payees (“VoPs”) and sanctions screening.
Through the IPR, ‘instant' credit transfers in Europe are revolutionised making them the go-to solution to immediately transfer credit at any time. One key amendment to the IPR relates to the VoP where PSPs within the Eurozone must provide payers with a service to verify the payee's name and IBAN whenever a transfer is initiated.
What is the VoP Service?
The VoP Service ensures that payers are able to verify a payee's name and IBAN number before authorising a credit transfer reducing the risk of fraud. The IPR specifies that such service is to be free of charge and should allow the payer's PSP to instantly send to the payee's PSP:
- A request to verify the payee's name and IBAN or
- An identification code identifying the payee, such as a VAT number or Legal Entity Identifier
In return the payee's PSP will instantly compare the received data with the data it has registered of that payee and then provide a VoP response to the payer, that being whether the information provided and the information on the system:
- match,
- do not match,
- has a close match or
- other
Since the VoP is a new service for payment service users, the European Retail Payments Board (ERPB) Task Force has issued guidelines on the types of response messages that may be shown to users. These aim to reduce confusion, particularly in situations where the payee's name and IBAN do not match.
Concluding Remarks
The amendments to the Regulation regarding VoPs aims to enhance trust in digital payments and reduce fraud or misdirected transfers by ensuring that payee information is verified before a transaction is completed. PSPs in Member States whose currency is euro are encouraged to prepare their systems and user interfaces ahead of October 2025 to ensure compliance and deliver a smooth customer experience. PSPs based outside of the Eurozone are not bound to supply the VoP service until the 9th July 2027.
This article was written by Legal Intern Martina Galea and reviewed by Head of Legal Franklin Cachia
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
