Verification of payee service
Published 17.3.2025
The service ensuring payee verification means the payer must receive verification before the payment’s approval that they are indeed transferring funds to the intended recipient. Under the Instant Payments Regulation, verification of payee must be offered for all credit transfers in euros made to EU or EEA states, not only for instant credit transfers, and in all payment channels for every payment before the payment’s approval.
After the payer provides the relevant payment data – essentially the name and account number – the payer’s bank requests the payee’s bank to confirm that the name provided by the payer corresponds to the account holder’s name known to the bank. The payer's bank must provide the result of this comparison to the payer.
Verification may result in a match, near match or no match. If the names are a near match, the payee’s real name must be provided to the payer. The payer can approve the payment even if the names do not match. In this case, the payer assumes responsibility should the funds be transferred to an unintended payee.
The development of this service requires us as a bank to build the required capabilities – both making queries in the bank network and responding to such queries concerning OP payment accounts. Moreover, the service must be made available to customers in all payment channels.
According to the regulation, companies submitting multiple payments as a package must be able to opt out of the verification of the payee service for their package. If the customer decides to opt out of the service, they will be held liable if their transfer goes to an unintended recipient. The decision on payee verification is therefore of major importance to the customer. From the customer’s perspective, payee verification may involve changes related to payment processes such as whether to perform verification for every transfer or only for some, how to react to the verification result in the case of a near match or no match, and who makes the ultimate transfer approval decision.
In Finland, the payee verification service for C2B payments will be implemented as a separate “pre-verification service”. This will minimise changes to the creation of actual payment data and to the sensitive payment transaction processing in banks. The method also minimises any unpredictability in the duration of payee verification as part of the payment process, as the customer can submit the payment data to the bank after payee verification within the limits of their normal processes and processing times. In other words, the customer chooses not to use the payee verification service if they do not first submit the payment data to payee verification with a separate data package for verification purposes.
For API payment transactions, opting out of payee verification is not possible under the regulation. This will lead to significant changes in the OP Corporate Payment API’s use to ensure we can offer the payee verification service for all credit transfers in euros. We are currently planning these changes in consultation with our customers.
We will release customer instructions, interface documentation and testing opportunities during spring 2025.
