TechnoXander 207 Verification of Payee (VoP) in 2024

In an age where digitisation is taking over, better security and accuracy of financial transactions is a must. Enter the new Verification of Payee (VoP) guidelines, set to revolutionise the banking system across Europe. Considering this, we are here answering these Verification of Payee (VoP) questions to help everyone understand the directive without any confusion:

  • What is Verification of Payee (VoP)?  
  • How does VoP work? 
  • Why VoP is important for Europe? 
  • What are the benefits of VoP for businesses? 
  • What are the challenges EU might face while implementing VoP? 
  • What are the rules to be followed while implementing VoP?

The answers to all these questions in this guide will help you understand the Verification of Payee (VoP) directive easily. Moreover, you can also consult all your VoP confusions with Verification of Payee experts at TechnoXander. Now without wasting time, lets understand what is Verification of Payee (VoP) and how does it work in this digital era: 

What is Verification of Payee (VoP)? 

Verification of Payee (VoP) will play an important role in the new Instant Payment Regulation (IPR).  It is created with rules, practices and standards adhering to an inter-payment service provider (PSP) to prevent immediate and irrevocable transfers from happening under the Single Euro Payments Area (SEPA) credit transfers.  

Verification of Payee Process

How does Verification of Payee (VoP) work? 

The Verification of Payee is a scheme developed by the European Payment Council to prevent payment fraud. It involves improving customer satisfaction and building trust in SEPA account-to-account transfers with immediate feedback on the payee verification. 

  1. The payee verification scheme allows the Payment Service Provider (PSP) of the payer (the Requesting PSP) to instantly send to the PSP of the payee (the Responding PSP), a request for payee IBAN and name verification as given by the payer (the Requester).  
  1. In addition, an unequivocal identification code (e.g., Value-Added Tax (VAT) number, a Legal Entity Identifier (LEI), social security code) about that payee. The reason behind this is that the payer intends to initiate a SEPA Credit Transfer (SCT) or a SEPA Instant Credit Transfer (SCT Inst) transaction with the payee.  
  1. The Responding PSP will then instantly verify whether the received data aligns with the concerned data registered for that payee at the Responding PSP.  
  1. The Requesting PSP will immediately be informed by the Responding PSP with a Verification of Payee (VoP) response (e.g., match, no match, or close match with the payee, match/verification check not possible).  
  1. The Requesting PSP then immediately passes on the response to the payer to avoid misdirected payments.  

What is the Need of Verification of Payee (VoP) integration in Europe? 

The implementation of Verification of Payee (VoP) is required as Europe moves towards Instant SEPA Transfer and requires PSPs to provide VoP services to their customers to avoid misdirected payments from execution.

This brings along with it a minimum Verification of Payee (VOP) service level that ensures pan-European acceptance and reach. VOP solutions or schemes must come with an interoperability “by design”.    

The Benefits of VoP for Businesses 

There are many benefits of Verification of Payee for Businesses you can experience. Below are some of the key VoP benefits businesses can encounter in 2024:  

  • To ensure pan-European acceptance and reach can be achieved, it establishes a minimum level of VOP service 
  • Ensures as much possible real-time data exchange “by design” with any existing VOP solutions or schemes 
  • Adoption of the scheme across Europe means businesses can get access to data on a wider scale 
  • It prevents misdirected payments saving cost and time 
  • Improves the end-user experience and trust in SEPA Instant Credit Transfers 

The challenges EU might face for Verification of Payee (VoP) Integration  

Like any other directive, you may face some challenges while implementing the Verification of Payee (VoP) directive for the first time. Some of the key VoP implementation challenges are listed below: 

  1. Technical Difficulties: Adding Verification of Payee (VoP) on site of an existing system would require careful coordination and planning. It would require PSPs and the banking system to work together to ensure the scheme’s effectiveness.  
  1. Acceptance: Getting consumers to adopt the scheme is crucial for the success of the scheme. Otherwise, it may result in a similar failure experienced by the UK with its Open Banking scheme.  
  1. Financial Inequality: Varying economic conditions across European countries could mean that not all regions can afford the required integrations and upgrades. 

Rules to be Followed in accordance with the Guidelines 

A set of inter-PSP rules and requirements are set for a smooth operation under the scheme. They are: 

Eligibility of Participants 

  • Partners of the scheme must be licensed PSPs in SEPA-authorised countries  
  • The applicant must be financially sound and meet solvency and liquidity requirements as well as other financial and regulatory requirements including anti-money laundering requirements and risk control measures. 

Requirements for Operation 

  • Users can operate services using Routing and Verification Mechanisms (RVMs) or Intermediary PSPs. 
  • Must be able to operate in compliance with the scheme and be reachable across SEPA. 
  • Handle situations pertaining to reachability. 

Partner Responsibility 

  • Comply with the processing rules for VoP applications and answers. 
  • Ensure that all linked employees and agents act in accordance with the Rulebook.  

In a nutshell, the Verification of Payee has the potential to change financial transactions in Europe for the better and make them more secure and trusted. Sure, there is no denying that there will be obstacles around implementation costs and technical issues, but its users will reap the benefits of its placement in SEPA.

You can see many Verification of Payee (VoP) vendors available online offering VoP solutions. However, we highly recommend taking some time and analyse everything before opting for a Verification of Payee (VoP) vendor for your company. For instance, you a suitable Verification of Payee (VoP) vendor must have the following traits: 

  • A team of VoP experts 
  • Easy VoP integration 
  • Modern security measures 
  • Instant support measures 
  • Smart VoP solutions 
  • Extensive open banking experience 

Out of all the existing VoP vendors, TechnoXander has all the traits mentioned above. Moreover, the open banking companies offering free consultation to offer your business a personalised Verification of Payee (VoP) solution. 

The European Payments Council has finalised the Verification of Payee (VoP) deadline as October 9, 2025. All the banks and financial institutions need to implement the Verification of Payee (VoP) guidelines to their online services before the given timeline. 

The TechnoXander Verification of Payee (VoP) API is a panacea for all your name verification requirements. It is an easy to integrate AP that you can easily add to your existing open banking software to enhance the security of your financial transactions. Below are some highlighting benefits of TechnoXander Verification of Payee (VoP) API: 

  • Easy to Integrate 
  • APP Fraud Reduction 
  • Cost Effective 
  • Enhanced Security 

Verification of Payee Technology for Organisations

Verification of Payee technology for organisations can prevent most APP Scams and APP Frauds across the European Union countries. As we all are aware with the fact that VoP (Verification of Payee) is a name verification service can helps you identify if your money is getting transferred into the right bank account or not. Hence, organisations that transact money everyday can automate their money transferring systems with the help of a Verification of Payee (VoP) solution without worrying about any APP scam.

Verification of Payee (VoP) is mandatory for all the banks and financial institutions across the European Union and must be implemented before 9th October,2025. Hence, FIs should commence planning for SEPA Instant Transfer and VoP implementation now.  

Experts at TechnoXander are ready to assist with not only their Implementation experience but also bring to you the insights from payee verification conducted across globe. Speak to us for: 

  • Free Verification of Payee (VoP) Consultation 
  • Verification of Payee (VoP) API Implementation 
  • Customised Verification of Payee (VoP) Integrations across Europe 
  • 24X7 Availability 
  • Follow the sun support model

With reduced fraud, increased verification and validation in real-time, and better customer confidence, VoP can become the go-to for digital banking in the EU. So yeah, it’s not going to be easy, but let’s see the change it brings to secure payments in Europe! Exciting times ahead! 

Don’t wait – enhance your payment security with Verification of Payee (VoP) today, our experts at TechnoXander are there for your assistance.

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