Banks and Fintechs: why they really need to secure their transfers right now

The upcoming entry into force of the Instant Payments Regulation (IPR) requires all regulated payment service providers, e-money institutions, and credit institutions to implement a Verification of Payee (VoP) service—also known as IBAN Name Check. This is designed to bolster payment security and prevent fraud.

Although these players (banks vs. fintechs) can differ greatly in size, they must all comply with the same obligation and have a solution in place by October 9, 2025.

Beyond the regulatory requirement, Verification of Payee is a real opportunity to enhance payment security and improve the user experience. Here’s why.

An essential protection against fraud

IBAN x Name Check verifies whether the name of a transfer’s beneficiary matches the actual account holder. This mechanism directly addresses the sharp rise in transfer fraud seen in recent years.

In the UK, the introduction of a similar system (Confirmation of Payee) reduced Authorised Push Payment (APP) fraud by about 30–40% within a few years. It’s quickly becoming a must-have for all payment professionals.

The risk of falling behind technologically

Most banks and fintechs affected by the regulation are already rolling out this verification service, and consumers will soon expect to receive confirmation of their beneficiary’s identity for each transfer.

Beneficiary verification will rapidly become standard practice. Not offering this service could mean losing ground to competitors and experiencing a decline in user confidence.

What if your client becomes a victim of fraud?

According to the IP regulation, if a user is not notified of a mismatch between the account name and IBAN, the institution processing the transaction could be held liable. Beyond the financial loss, its reputation as a trusted third party is at stake.

This liability is especially significant given the gradual rollout of instant payments (transfers completed in under 10 seconds), which make it far more difficult for banks to recover funds in the event of fraud.

What if your client stops receiving transfers?

Another consequence of failing to implement an IBAN x Name Check solution is the potential difficulty for end customers to receive transfers. An account-holding institution that does not share account-holder information with other providers could appear suspicious.

Without the ability to verify the identity linked to an IBAN, some individuals or businesses might refuse to initiate a transfer to those account numbers, fearing fraud.

How will fraudsters react?

This question is critical: How will fraud networks adapt to the new regulation? It seems likely they will seek out banks or fintechs that do not conduct VoP checks, allowing easier identity theft and fraudulent transactions.

In summary

Rather than viewing VoP / IBAN x Name Check as a regulatory burden, banks and fintechs can leverage it to strengthen the security of transfers and enhance the customer experience.

In the face of this challenge, Qombo’s solution allows Payment Service Providers to implement Verification of Payee in just a few weeks, enabling them to verify all bank accounts across Europe.