What you should know about the EU's change in banking security

It’s the latest stage of the introduction of instant bank transfers across the Eurozone.

Since January 9th this year, Eurozone banks have been required to have the capacity to receive instant payments, as part of the European Commission’s Instant Payments Regulation (IPR), which was brought in to update and speed up the bloc’s electronic payments process.

From Thursday, October 9th, 2025, Eurozone banks must be able to also send instant payments, with the remainder of EU financial institutions following suit by 2027 at the latest, meaning all transfers between EU banks will be completed within 10 seconds.

Screening and fraud detection processes are being beefed up to reduce the risks associated with real-time payment processing.

From October 9th, banks in the Eurozone will implement a real-time verification system for all bank transfers known as Verification of Payee (VoP). This system places a new onus on users to ensure that the beneficiary name entered by the customer during the transfer matches the IBAN of the account.

How does the VoP work?

When an individual makes a bank transfer (instant or traditional), their bank automatically queries the beneficiary’s bank to verify a match between the name entered and the name linked to the account reference with the IBAN banking number. This verification, carried out in real time, can lead to one of the four following results:

Exact match: Name and IBAN match.

Partial match: the name is close but not identical.

No match: Name does not match IBAN.

Unable to verify: The account does not exist or cannot be verified.

The customer will be informed of the status of the query result – whether it’s an exact or partial match, or doesn’t match at all, or whether the bank cannot verify the match – and can decide to correct or confirm their transfer.

The name that appears on the IBAN will not be disclosed.

After being informed of the result, the customer can correct or confirm their transfer. “Even in the event of a mismatch, the customer remains free to execute the transfer, but in full knowledge of the facts,” the Fédération Bancaire Française (FBF) explains in a guide on its website. 

In other words, the bank can no longer be held liable in the event of fraud or error.

The FBF also sets out best practices to adopt in response to the introduction of this system, in particular checking mismatch alerts before confirming a transfer – and, above all, “using full and accurate names”.