Verification Of Payee in the EU: A Guide for Banks & PSPs

With 42% of financial institutions seeing an increase in fraud in 2024 and digital payments becoming the norm, ensuring that money reaches the right account when a payment is sent is more important than ever. That’s why the European Payments Council (EPC) has introduced Verification Of Payee (VOP), a scheme designed to reduce fraud and misdirected payments across the EU.

The EU’s first VOP rulebook was published in October 2024, and as of 9th October 2025, banks and payment service providers (PSP) offering instant payments in the Single Euro Payments Area (SEPA) are required to comply. Non-Eurozone EU PSPs have a later deadline of July 2027.

So, what exactly is VOP, why does it matter, and what do banks and PSPs need to do to comply? Let’s dive in.

What is Verification Of Payee?

VOP is a fraud prevention and security measure that ensures a payment is being sent to the correct person or business by verifying the payee’s details before the transaction is processed.

Similar to Confirmation of Payee (CoP) in the UK, the EU scheme enforces that checks are made before a payment can be sent from one account to another. With VOP there’s a check to confirm that the payee name matches with the account details, like account number, to reduce the risk of a payment going to the wrong person. The VOP scheme was developed to comply with legal obligations stemming from the EU Instant Payments Regulation (IPR).

What gets verified? A VOP check confirms one of two attribute confirmations:

• The payee’s name, together with their IBAN
• The payee’s IBAN, together with an identifier code (such as an LEI)

Under EU rules, VOP checks must be provided to customers free of charge – PSPs can’t charge for the verification itself.

How does Verification Of Payee Work?

When a person or business initiates a transaction, the payer’s PSP sends a verification request to the payee’s PSP, checking whether the IBAN and payee name match the records on file. The response comes back as one of four outcomes:

• Match – The details are correct, and the payment can proceed.
• No Match – The details do not match the recipient’s account information.
• Close Match – Some details are similar but not exact, prompting the payer to review the information.
• Not Applicable – The check couldn’t be completed (for example, if the receiving PSP doesn’t support VOP or the request can’t be processed).

If a ‘no match’ or ‘close match’ response is received, the payer can decide whether to proceed with caution, correct the details, or contact the recipient before completing the transaction.

Why is Verification Of Payee Important?

1. Reducing payment fraud

Fraudsters increasingly trick individuals and businesses into sending payments to fake or compromised accounts. VOP acts as a security checkpoint, catching payments before they’re misdirected to fraudulent accounts.

The UK’s Confirmation of Payee (CoP) scheme, introduced in 2020, has reduced fraud cases by nearly 60%. A similar impact is expected across the EU once VOP is fully implemented.

2. Preventing human error

Mistyped account numbers and incorrect recipient names cause costly mistakes. VOP catches these before payment goes through, not after.

3. Strengthening trust in digital payments

Customers and businesses gain confidence knowing payments are verified before they’re sent – increasingly important as instant payments become the default.

Key Dates for Banks and PSPs

March 2025 – Adherence process opened.

5th October 2025 – The rulebook came into effect.

9th October 2025 – Implementation deadline for Eurozone PSPs.

July 2027 – Implementation deadline for non-Eurozone EU PSPs.

Challenges and Considerations for Banks and PSPs

Banks and PSPs face a choice: Build VOP in-house or partner with a third party. In-house development can be costly and complex, since implementing VOP requires real changes to a PSP’s IT infrastructure.

Financial institutions need to weigh the investment required for compliance – technology integration, operational impact, and ongoing maintenance. Beyond cost, there are technical and operational challenges too: integrating VOP into existing infrastructure, managing processing times, and training staff across fraud, compliance, and customer service.

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VOP is now a standard part of the SEPA payments landscape, and as non-Eurozone PSPs work toward their July 2027 deadline, adoption will keep expanding across the EU.

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