Verification of Payee system introduced for SEPA bank transfers

European payment regulations have introduced the ‘Verification of Payee’ mechanism to enhance security for both ordinary and instant bank transfers within the SEPA area. This technical procedure compares the beneficiary's name provided by the sender with the IBAN details held by the recipient's bank to ensure data consistency.

The verification process occurs in seconds and incurs no additional costs for the customer. It can be used via mobile apps, home banking, or at bank branches. If the system finds a perfect match, the transaction proceeds normally. If a discrepancy is detected—such as a misspelled name or a mismatch between the name and the account holder—the system issues a warning.

Crucially, the bank does not automatically block the payment in the event of a mismatch; the final decision to proceed with the transfer remains with the customer. The primary goal of this measure is to reduce errors, prevent fraud, and minimize accidental transfers to incorrect accounts.