EPC's first version of the VoP scheme rulebook now available

After a public consultation launched in February 2024 on the proposed VoP scheme rulebook and the EPC recommendations for the matching processes under the scheme directory, the regulator has now introduced the first version of VoP. This version was developed to support payment service providers (PSPs) in the Single Euro Payments Area (SEPA) that need to comply with legal requirements on the verification of a payee in case of credit transfers, as included in the proposed EU Instant Payments Regulation (IPR) revising the SEPA law.

EPC releases the first version of the VoP scheme rulebook

The first version of the VoP scheme guideline mostly aims to conform to the EU legislative obligations set out by the IPR, with the rulebook limiting itself to verifications of a payee related to a SEPA Credit Transfer (SCT) or a SEPA Instant Credit Transfer (SCT Inst). In addition, provisionally, this version intends to enable PSPs in the European Economic Area (EEA) to comply with the new regulations within the provided guidelines. On the other hand, upcoming renderings of the VoP scheme rulebook are set to cover other payment instruments, conditional on market needs or interest.

The Verification of Payee scheme

In the upcoming period, financial institutions across Europe are set to undergo significant changes to their technical processes to implement 24/7 instant payments. Effective as of 8 April 2024, the Instant Payments Regulation directs that European banks and PSPs must deliver instant euro transfers at a similar cost to regular transfers, with the first implementation deadline requiring them to receive instant credit transfers by 9 January 2025.

The VoP scheme focuses on supporting EU banks in preventing misdirected payments by ensuring the account name matches the number before executing transfers. This mandates 24/7 availability, rapid response times, and augmented APIs and name-matching algorithms by October 2025.

Through the VoP scheme, a PSP of a payer is set to be able to promptly send a request to a responding PSP to verify the International Bank Account Number (IBAN) and the name of the payee as provided by the requester, or an identification code which explicitly identifies that payee, including a Value-Added Tax (VAT) number or a Legal Entity Identifier (LEI). This request comes due to the payer intending to initiate an SCT or an SCT Inst transaction to the payee.

Following this, the responding PSP instantly validates whether the received data matches the related data registered for that payee at the responding PSP, with the former then offering a VoP response, including match, no match, close match with the name of the payee, or verification check not possible. Afterwards, the requesting PSP passes the response to the payer.

EPC releases the first version of the VoP scheme rulebook

The Verification of Payee scheme