The European Payments Council’s (EPC) Verification of Payee (VoP) scheme focuses on predominantly fulfilling the EU legislative requirements set out by the IPR and emerges as a go-to set of guidelines for anyone looking to develop or implement VoP.
The scheme aims to standardise the process of VoP checks ensuring that the 5000+ institutions talk the same language. Central to this framework are routing and verification mechanisms, which can lead the way for PSPs seeking seamless, accurate, and compliant payment operations.
This blog explores the actors in VoP checks and the role of routing and verification within the EPC VoP scheme. The blog highlights how mechanisms must align with the scheme’s objectives and what to look for when selecting an RVM.
Actors and their Roles in VoP
The actors involved in the EPC VoP process are essential to the execution and success of the rulebook. These actors include:
- The Requester: The Requester is the payer initiating a Payment to another natural or legal person (payee) holding a Payment Account at a Payment Service Provider (PSP) based in SEPA.
- The Requesting PSP: Requesting PSP or the Participant with whom or through whom the Requester intends to make its Payment Account-based Payment.
The Requesting PSP receives an IBAN and Name of the Payment Counterparty or potentially a data element, other than the IBAN, which unambiguously identifies the Payment Counterparty from the Requester (i.e., theidentification code).
The Requesting PSP must initiate the request to verify these details about the Payee as provided by the Requester.
The Requesting PSP Instantly sends a VOP Request to the PSP holding the Payment Account.
Upon receipt of the VOP Response, the Requesting PSP Instantly informs the Requester about the VOP Response sent by the Responding PSP as appropriate.
- Payee: The recipient of the payment. Their account details must be accurately matched with the payer’s provided information to complete the transfer.
- The Responding PSP: Payee Bank or the Participant that holds the account of payee and usually where the payment is being credited.
Responding PSP receives the VOP Request from the Requesting PSP and Instantly processes that VOP Request.
The Responding PSP sends a VOP Response containing a matching result about the received details of the Payment Counterparty or the code Verification check not possible, back to the Requesting PSP.
- Routing and/or Verification Mechanisms (RVMs): Requesting PSPs and/or Responding PSPs can use RVM’s to route VOP Requests and related VOP Responses, to Responding PSPs and Requesting PSPs respectively.
Use of Routing and Verification Mechanism’s will play an important role in connecting over 5000+ PSPs in the Eurozone for conducting VoP checks.
How RVMs like TechnoXander can help?
Routing and Verification Mechanism’s will play an important role in connecting over 5000+ PSPs in the Eurozone for conducting VoP checks.
We can do the below as RVM for a PSP, EMI or PI looking to conduct VoP checks and achieve compliance with EPC VoP scheme and Instant Payment Regulation.
- Receive VoP Requests from the Requesting PSP who agrees to participate in VoP scheme with us as RVM
- Cache EPC Directory (EDS) to route requests optimally to Responding PSP for fast response
- Format the VoP request as per EPC standard and forward the VoP Requests in full to the Responding PSP who participates in the EPC VoP scheme as Responder
- Forward a VoP Response from the Responding PSP in full and without alteration to the Requesting PSP
- Conduct authorisation and authentication on behalf of Responsing PSP where the Responding PSP participates in the VoP scheme with us as RVM
- Conduct the VoP matching on behalf of the Responding PSP where we have an agreement with the Responding PSP to act as RVM
- Provide analytics and MI reports for VoP actions conducted on behalf of Requesting or Responding PSP
Must-have for VoP service provider
When selecting a Routing and Verification Mechanism (RVM) for the EPC VoP scheme, it is essential to evaluate its capabilities against the following key qualities:
- Uninterrupted Availability: The RVM should be available 24/7/365, ensuring that verification checks can be conducted at all times without interruption.
- High Performance: The chosen mechanism should complete Verification of Payee (VoP) preferably under one second ensuring excellent user experience.
- Robust Scalability: As checks are required for all SEPA credit transfers, RVM must be capable of handling the peak time transaction volumes so that there are no delays due to system overload.
- API and Interfaces: VoP checks are required across all payment initiation channels, including mobile apps, online banking, open banking platforms, and paper-based payment orders. Financial-grade APIs for quick integration and user-friendly interfaces for use in retail branches or during manual payment operations are required.
- Advanced Matching Engine: The verification mechanism matching engine should be equipped to handle the complexities of European naming conventions. This includes recognizing diacritics and accommodating regional name variations for matching accuracy.
- Future-Ready Design: Select an RVM that offers a global name verification solution with a single API capable of conducting VoP checks across SEPA and non-SEPA zones. This ensures adaptability to evolving regulatory and market demands.
- Enhanced Reachability: The RVM should be prepared for future expansions of the EPC VoP scheme, including potential integrations with non-SEPA countries, to save on integration and upgrade efforts later.
By prioritising these features, PSPs can select an RVM that not only meets current requirements but also supports long-term operational and regulatory needs.
For PSPs and financial institutions, adopting the EPC VoP scheme is an opportunity to enhance customer trust, reduce operational risks, and align with the evolving payment ecosystem. As payment technologies advance, the role of routing and verification will only grow, paving the way for a safer, more efficient financial landscape.
Is your organization ready to embrace the EPC VoP scheme? Contact us today at vop@technoxander.com to learn how our VoP RVM solution can help you implement VoP so your bank stays ahead in the payments industry.
