Verification of payee is the name check a bank in the euro area now runs before you send a euro credit transfer. You type an IBAN and the recipient’s name, and before you confirm, the app tells you whether that name matches the account. The answer can be a match, a close match with the registered name shown, no match, or a notice that the check was not possible.
The check comes from Regulation (EU) 2024/886, the Instant Payments Regulation, which amended the SEPA Regulation. Payment service providers in euro-area countries had to comply by October 9, 2025; those in EU countries that do not use the euro have until July 9, 2027. The banks’ common rules for exchanging the check are set out in the European Payments Council’s Verification Of Payee scheme rulebook.
The problem it addresses
A SEPA transfer is routed by the IBAN. Without a check against the account, a wrong digit, or an invoice whose bank details were altered by a fraudster, could send money to the wrong account while the name on screen looked correct.
Verification of payee compares the name you entered with the name the recipient’s bank holds for that IBAN, before you authorize the payment. It does not stop a transfer and does not decide whether the recipient is honest. It tells you whether the account belongs to the name you entered.
How the check runs
The regulation requires the payer’s provider to offer the check to anyone who intends to send a credit transfer, and to run it right after the payer enters the payee’s details and before the payer is asked to authorize. It applies whichever channel the payer uses to start the payment.
According to the EPC rulebook, your bank sends the IBAN and name to the recipient’s bank. The recipient’s bank compares them with its own records and replies. Your bank passes the result on to you. The 2026 version of the rulebook sets a maximum of 5 seconds; if no reply arrives in time, your bank reports that the check was not possible.
For transfers to a business, the regulation also allows the IBAN to be checked against another identifier, such as a legal entity identifier, when the payer’s channel supports it and the recipient’s bank holds that data. The EPC’s matching guidance says such codes produce only a match or no match, never a close match.
What each result means
| Result | What your bank shows | What it tells you |
|---|---|---|
| Match | Nothing required; many banks confirm it | The name matches the account holder’s name |
| Close match | The name registered for the account | The name is nearly right; compare it with the one you expected |
| No match | A warning | The account may not belong to the person or company you named |
| Verification check not possible | A warning | No result was obtained, so nothing was confirmed |
For a no match, a failed check or no response, the rulebook requires your bank to warn you that authorizing the payment may send the funds to an account not held by the payee you named. How the warning is worded is up to each bank.
The recipient’s bank decides what counts as a close match. The EPC’s recommendations for the matching process list small deviations it may treat that way: a limited spelling mistake, two inverted letters, a first initial with the full last name, or a letter replaced by one that sounds the same. For companies, the guidance adds names in a different order and common abbreviations. Each bank can apply stricter or additional criteria, so the same typo can produce different results at different banks.
A worked example
Suppose you receive an invoice from “Northfield Studio GmbH” and type that name with the IBAN on the invoice.
- If the recipient’s bank holds “Northfield Studio GmbH” for that IBAN, you see a match.
- If it holds “Nortfield Studio GmbH,” you may see a close match with that name. That looks like a typo in a record, and you can decide whether to correct the name and continue.
- If it holds “M. Keller,” you see no match. The invoice name and the account holder differ. That can have an innocent explanation, such as a payment processor’s collection account, but it is also the pattern of an altered invoice. Confirm the bank details with the supplier through a contact you already have, not one printed on the same invoice.
The example is hypothetical. The result depends on the data the recipient’s bank holds and the criteria it applies.
You can still send the payment
The regulation says the verification must not prevent the payer from authorizing the transfer. After a warning, you decide.
That decision matters for liability. Under the regulation, a provider that has complied with the verification rules is not liable for executing a transfer to an unintended payee on the basis of an incorrect account identifier. If the payer’s provider fails to carry out the check as required and that causes a defectively executed payment, it must promptly refund the payer, and it can recover the loss from the recipient’s provider or payment initiation service if they caused the failure. The EPC’s VOP FAQ refers liability questions to the regulation itself.
Businesses sending payments in bulk
Companies that submit several payment orders as a package can opt out of verification, and can opt back in at any time, under the regulation. The opt-out is for non-consumers only. A business that opts out must still be told that authorizing a payment may send funds to an account not held by the intended payee.
For a finance team, opting out removes the per-payment check, not the risk it was meant to catch.
Fees and coverage
Article 5b(2) of the amended regulation says the verification services must be provided to all payment service users free of charge.
The EPC scheme covers SEPA Credit Transfers and SEPA Instant Credit Transfers in euros. Payments in other currencies, card payments and transfers outside the scheme are not checked this way. For the costs that can apply to transfers across currencies, see our guide to international transfer costs.
Verification of payee vs the UK’s Confirmation of Payee
People who pay into UK accounts meet a similar check under another name. Confirmation of Payee, run by Pay.UK, checks the name against the sort code and account number for UK domestic payments. It started in 2020, when the Payment Systems Regulator required the six largest banking groups to adopt it; in October 2022 the regulator’s Specific Direction 17 extended the requirement to around 400 payment providers by October 31, 2024, according to Pay.UK.
The outcomes look alike: Pay.UK’s FAQ lists match, close match, no match and unavailable. Two differences matter in practice. Confirmation of Payee also checks whether the account is personal or business, and it uses UK account details rather than an IBAN. A euro transfer to a UK bank is outside the EU scheme, and a sterling payment to an EU account is outside the UK one.
