Following this announcement, the specifications are based on the proposal of the European Payments Council’s VOP Scheme Rulebook. The service is expected to leverage blocks of its recently launched Fraud Pattern and Anomaly Detection (FPAD) functionality in order to provide comprehensive IBAN/name-matching solutions with a broad reach across SEPA starting from December 2024.
At the same time, the delivery will be completed 10 months before the October 2025 deadline which was set by the Instant Payments Regulation, when the obligation for payment service providers (PSPs) across the eurozone to deliver a Verification of Payee tool to their individuals will come into force.
FPAD represents an integral part of the pan-European retail payment system STEP2 and RT1, and it has been available since March 2024. The solution also provides the users of both services with a wide range of real-time fraud prevention and detection tools. In addition, the functionality already allows PSPs to conduct beneficiary name verifications before a payment or transaction is sent. With the December 2024 delivery, this functionality is set to be optimised with the EPC VOP Rulebook requirements.
At the same time, PSPs will also have different options to use the comprehensive Verification of Payee capabilities of FPAD, both on the responding and requesting side. This process will enable PSPs in order to adapt their approaches over time, whilst ensuring that a full pan-European reach from the start. Leveraging the FPAS capabilities also allows PSPs to address the overall risk considerations and limit friction for end customers and clients, alongside the procedure of fulfilling compliance requirements.
The initiative will also allow users and clients to get a head start on preparing for regulatory compliance. In addition, the different capabilities provided by FPAD will give PSPs the possibility to address their wider fraud-fighting needs, as well as further strengthen customer experience and security. For users, the issue at stake is to develop friction in the client journey where it is needed for the sake of fraud prevention, as well as to avoid it where it is not needed.
By combining scheme-compliant Verification of Payee checks with other FPAD indications, as well as their insights, PSPs will have the opportunity to remove doubts, while also benefiting from the power of the network view offered by FPAD in order to minimise friction for legitimate transactions.
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