Instant Payments Regulation update/Q&A:

What you need to know

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12/08/2024

The European Commission recently released a Q&A on it’s interpretation of the Instant Payments Regulation, designed to accelerate adoption and improve security with Verification of Payee (VoP). Coming into effect in October 2025, the new requirements have created a range of complex scenarios. That’s why the latest update – delivered in a Q&A format – includes a whopping 203 questions from PSPs, banks and other technology providers, spread across 82 pages. We’ve delved into the detail, picked out five of the biggest questions about Verification of Payee, and given a bit more context to some of IPC’s answers – including how they might affect your business.

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1. Do whitelisted and trusted beneficiaries need to be checked through VoP?

In a word, yes.

As stated in introductory wording of Article 5c, IPR requires that all payments must have a VoP check. This includes instant and non-instant payments, standing orders, and even where the requesting and responding PSP are the same (On-us checks).

2. Can PSPs block payments based on the VoP check?

In a word, no.

In the event the account of the payee is no longer available, only the payer can decide whether to proceed with the payment – not the PSP.

3. What qualifies as a close match?

A number of questions touch upon this particularly complex area. Is there a standardised approach? What should be returned as a name suggestion in case of such outcome? And what are the implications for privacy and GDPR?

According to Recital (21), in a case of an ‘almost match’ between payee names and account identifiers, full names must be provided – and in a manner that is compliant with GDPR. For SurePay customers, this is not an issue, thanks to our tried and tested algorithm that easily handles these kinds of subtleties, without significantly impacting the payment flow.

4. What are the provisions for ‘me-to-me’ credit transfer services for:

Article 5c does not require provision of the VoP service upon beneficiary account registration.

The VoP service must be provided for each payment order. In this case, point (d) of Article 5c(1) and Article 5c(3) apply. The PSP is responsible for the accuracy of payee information. A number of our customers have raised this issue, and a lot of confusion remains. But this is a closed loop: payments to a specific IBAN always come from the same IBAN.

5. When should the VoP check happen for batch payments?

Another popular topic with our customers, banks must offer the VoP service for bulk files unless the customer opts out. This should happen immediately after payment order details have been provided. VoP checks should be completed before the payment is authorised. As only the payer can authorise the payment, how long the process takes to complete will vary.