Trust is becoming more strategic in the relationship between customers and suppliers. Digitalisation has revolutionised access to financial services, making transactions faster and more accessible. At the same time, however, it has widened the surface exposed to cyber threats, increasing the risk of fraud and compromise in payment processes, particularly in B2B operations.
To address these challenges, the European Union has launched a structural transformation of the digital payments system, which introduced new standards for security and transparency.
In this context, the Verification of Payee (VoP) has emerged: a service that enables the verification of the match between an IBAN and the account holder before a payment is authorised.
BANK TRANSFER FRAUD: A GROWING RISK FOR BUSINESSES TOO
The steady increase in the volume and complexity of digital transactions has simplified daily operations and created new vulnerabilities. Bank transfer fraud remains one of the most critical issues, particularly in business-to-business transactions.
According to the latest data from the Bank of Italy, in 2024 the value of fraud detected on transfers made via Italian Payment Service Providers reached approximately €50 million—up 67% on the previous year.
Although bank transfers show a lower fraud rate than other tools such as payment cards, the financial impact per transaction can be significantly higher. The average value of fraud stands at around €3,500, with considerable peaks in B2B transactions.
One of the most common scams is payee manipulation, in which the fraudster convinces the victim to make a payment to an apparently correct account that is in fact linked to fraudulent activity. In 2024, this technique accounted for 74% of the total value of fraud and 65% of all fraudulent transactions.
A particular area of vulnerability concerns instant transfers, which, unlike standard ones, cannot be cancelled once executed. According to the Bank of Italy’s report, the fraud rate by value for standard transfers was 0.001%, compared to 0.048% for instant transfers. This figure underlines the urgent need for more robust and timely verification tools.
THE EUROPEAN UNION AIMS FOR A RELIABLE, INSTANT AND TRANSPARENT PAYMENTS SYSTEM
In light of these vulnerabilities, the European Union has introduced a major regulatory reform that is set to profoundly reshape digital payments.
At the heart of this transformation is EU Regulation 2024/886, known as the Instant Payments Regulation (IPR), which aims to make instant bank transfers a safe and accessible standard for all European citizens and businesses.
The Regulation introduces two key deadlines:
- From 9 January 2025, all PSPs (Payment Service Providers) established in the euro area must be able to receive euro-denominated instant payments 24/7. Another key aspect is the principle of tariff neutrality: charges for instant payments must not exceed those applied to standard transfers. This requirement aims to encourage the widespread adoption of real-time payments by eliminating economic barriers.
- From 9 October 2025, these PSPs must also offer outbound euro instant payments, manage amount limits and integrate Verification of Payee (VoP) for each transaction, ensuring a prior check of the match between the beneficiary’s name and the account holder.
This measure is part of a broader strategy to strengthen the European payments infrastructure, promoting competition, inclusion and security. In this regard, the IPR complements other regulatory tools such as the Payment Services Directive (PSD2), the SEPA Regulation, the SFD Directive and the Cross-Border Payments Regulation.
WHAT IS VERIFICATION OF PAYEE, AND HOW DOES IT WORK?
Verification of Payee is a service designed to enhance the reliability of both standard and instant SEPA transfers. It’s based on a real-time automated check that compares the IBAN provided by the payer with the beneficiary's name registered with the receiving bank.
Its goal is twofold: to prevent certain types of fraud and to reduce material errors that could lead to disputes or operational issues.
In detail, when a customer enters the data to make a transfer, the payer’s bank sends a request to the beneficiary’s bank to verify whether the name and IBAN match. The system returns a response in seconds: match, no match or partial match. In B2B contexts, the check may also include additional unique identifiers such as VAT or tax numbers. Whenever the result is anything other than “match”, the user is informed of the discrepancy so they can decide whether to proceed. The service is not blocking but is designed to notify the customer of any discrepancy between the IBAN and the name of the beneficiary entered by the payer.
The VoP service is designed to be interoperable at European level and is based on the regulatory framework defined by the European Payments Council, which ensures technical and procedural consistency.
THE STRATEGIC OBJECTIVES OF VOP
Verification of Payee (VoP) is a concrete and innovative response to the demand for transparency and reliability that characterises the evolution of digital payments in Europe. Its introduction aims to boost users’ trust – individuals, businesses and institutional players – while supporting the development of a shared, harmonised and resilient infrastructure.
The main strategic objectives of VoP are:
- Security: VoP reduces the risk of incorrect transactions by ensuring that funds are sent to the correct recipient. The pre-check of the match between the IBAN and the beneficiary’s name helps intercept errors, enhancing protection for businesses and consumers. EU Regulation 2024/886 introduced it as a mitigation tool to counter fraud patterns; VoP is effective, for instance, against scams like Business Email Compromise and IBAN swap. However, users must always remain alert to possible risks associated with fraudulent scenarios.
- Interoperability: The SEPA VoP scheme is designed to function consistently across different Payment Service Providers operating in EU countries and, in the future, in the EEA. This approach facilitates information exchange and ensures compatibility between different systems, fostering an integrated and uniform payments ecosystem.
- Standardisation: Adopting shared European-level rules ensures consistency in checks, anomaly management and user experience. Standardisation makes the VoP service scalable, reliable and easy to understand, improving operational efficiency and reducing ambiguity among the various stakeholders involved.
VoP is therefore not merely a technical tool, but an enabler in building a more reliable and market-aligned digital payments infrastructure.
THE BENEFITS OF VERIFICATION OF PAYEE FOR BUSINESSES
The introduction of Verification of Payee (VoP) represents a real opportunity for businesses operating in an increasingly digital and interconnected economic environment. While the regulation mandates the adoption of this tool, VoP is also a valuable asset for improving the management of corporate financial flows, enhancing operational security and optimising resources.
The main benefits for businesses include:
- Enhanced security: VoP enables real-time verification of the match between IBAN and beneficiary name, reducing the risk of sending funds to the wrong recipient or to fraudsters. This is especially effective against scams such as Business Email Compromise (BEC), where criminals impersonate trusted suppliers to intercept high-value payments. Avoiding a single fraudulent transaction can mean saving tens or even hundreds of thousands of euros.
- Greater reliability and trust in digital payments: Knowing that each transaction is subject to an objective and automated check reinforces the company’s credibility with clients and suppliers, improving commercial relations and reducing disputes linked to incorrect or undelivered payments.
- Operational efficiency and error reduction: Automated data verification reduces the need for manual checks and minimises input errors. This leads to fewer corrective operations and greater efficiency in administrative and treasury processes.
In this light, VoP is not just a control tool, but a practical support for companies seeking to strengthen operational resilience, protect financial flows and drive growth in a competitive and regulated environment.
EUROPEAN EXPERIENCES: EARLY ADOPTERS OF BENEFICIARY VERIFICATION
Before the introduction of a harmonised European scheme, some countries had already tested VoP solutions at national level. This provided an early indication of the tangible impact this tool can have on the business ecosystem.
In the United Kingdom, the Confirmation of Payee (CoP) system, introduced in 2020 by Pay.UK, made beneficiary verification mandatory for major banks. Companies initially had to adapt their IT systems and redefine operational flows to manage the new control logic, requiring technical and organisational investments. However, in the medium term, CoP enhanced security, reduced transfer-related costs, decreased disputes and improved corporate reputation among clients and suppliers.
A particularly successful case is the Netherlands, where SurePay’s service, adopted since 2017 by a consortium of banks, has had a tangible impact in preventing fraud and reducing payment errors. Here too, companies have benefited over time from streamlined processes, fewer operational vulnerabilities and stronger internal compliance.
Sweden, Finland and Belgium have adopted similar approaches, often integrated into digital banking services, although the lack of shared standards has limited interoperability between providers from different countries.
These national experiences have confirmed that introducing VoP tools is a driver of progress not only in regulatory terms but also in improving the efficiency and reliability of corporate payments. Hence the European push to create the VoP SEPA Scheme, aimed at extending these benefits EU-wide by ensuring consistency, scalability and integration among all Payment Service Providers.
A SHARED INFRASTRUCTURE FOR A MORE COMPETITIVE EUROPE
The adoption of Verification of Payee is part of a broader vision to strengthen Europe’s digital payments infrastructure. In a context where speed is essential, the goal is to complement immediate transactions with increased security. To this end, VoP will rely on existing infrastructures such as CBI Globe in Italy and EBA Clearing at pan-European level, which will facilitate integration between Payment Service Providers.
Shared standards, uniform rules and technical interoperability are key to reducing fragmentation and promoting a truly integrated financial ecosystem. VoP is a concrete tool to support innovation and competitiveness within the European system, laying the groundwork for a more efficient and trust-based single digital payments market.
The mandatory implementation of Verification of Payee from October 2025 offers Italian businesses an opportunity to improve financial flow management, reduce operational risks and align with the most advanced European standards. A step forward towards a more resilient, efficient and integrated market that benefits the entire economic community.