iPiD launches AI name matching solution for Payee Verification

Using Microsoft Azure OpenAI Service, this tool addresses name matching challenges and ensures compliance with Europe’s Verification of Payee (VoP) requirements, starting from October 2025.

Name matching is important for payment security and regulatory compliance, particularly in preventing payments to sanctioned entities. New VoP regulations require financial institutions to verify that the payer's name matches the recipient's bank account name to combat scams. Institutions must categorise name matches into three groups before processing payments:

• match: exact name match;

• partial match: close match with suggested corrections;

• no match: no correlation with the provided name.

While positive matches are straightforward, distinguishing between partial matches and no matches presents operational and legal challenges, particularly in relation to GDPR, as it may inadvertently reveal sensitive payee information. Determining the boundary between partial matches and no matches requires the use of precise algorithms. Strict algorithms might mistakenly flag legitimate payees as potential issues, while more lenient approaches could violate GDPR by unnecessarily exposing payee names. The complexity of this task is compounded by variations in names, including spelling differences, nicknames, middle names, acronyms, transliterations, and differences in alphabets.

To tackle these kinds of issues, iPiD created iPiD Match, a name matching algorithm developed with Microsoft and powered by Azure OpenAI Service. Using PostgreSQL and advanced tools, it meets the needs of VoP, ensuring compliance while minimising false negatives and adhering to data privacy standards.

Key benefits for financial institutions and payment service providers (PSPs) include:

• improved accuracy by reducing false negatives;

• increased compliance with regulatory standards, including GDPR;

• optimised customer experience for better payment journeys.

This name matching solution supports financial institutions in achieving VoP compliance, inviting stakeholders to explore its potential for better business and customer outcomes.