EBA Clearing issues specifications for Verification of Payee solution

EBA Clearing has published the user specifications for its pan-European Verification of Payee (VoP) solution to allow payment service providers (PSPs) to “get a head start on preparing for regulatory compliance”.

The specifications issued by EBA Clearing are based on the proposals in the European Payments Council’s VoP Scheme Rulebook.

The intention is to provide an IBAN/name-matching solution with “broad reach” across the Single Euro Payments Area (SEPA), starting from December 2024, meaning that delivery will be 10 months ahead of the deadline.

The Instant Payments Regulation set a deadline of October 2025 for PSPs in the eurozone to provide a VoP service to their customers.

EBA Clearing’s VoP solution will leverage the Fraud Pattern and Anomaly Detection (FPAD) functionality, which is 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 range of real-time fraud prevention and detection tools, and already allows PSPs to conduct beneficiary name verifications before a payment is sent.

The VoP capabilities of FPAD will give PSPs different options on both the requesting and responding side.

“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,” Olivier Jolyon, head of new initiatives at EBA Clearing, said.

“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 that for PSPs, it is about being able 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”.

Kulk added: “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.”

Last week, Swift revealed the findings of its research into the expected impact of the EU’s Instant Payments Regulation on European SMEs which showed that the majority believe it will have a positive impact on their business.

Further reading: Advancing global fraud prevention – Verification of Payee