With European regulators tightening deadlines around instant payment security, financial infrastructure firm Tietoevry Banking is warning that bank hesitation on Verification of Payee (VoP) compliance could carry serious consequences.
VoP verifies all parties to a transaction within five seconds, a critical safeguard for instant payments. Where it has been adopted, the results are compelling. In the Netherlands, the technology has helped cut all-cause fraud by 81% and reduced misdirected payments by 67%, according to Tietoevry Banking.
Despite this, some banks are weighing up opt-outs. Reasons cited include national data privacy legislation, such as laws in Norway that restrict VoP-style services, as well as concerns about the cost of engaging a Routing and Verification Mechanism (RVM) provider. RVM providers reduce operational complexity by managing verification requests between banks, maintaining API interfaces and supporting compliance with instant payment regulation.
The warning carries particular weight for banks serving corporate clients. That segment is estimated to be three to four times larger than the consumer payments market, meaning undetected fraud could generate substantially higher losses. Some corporates have also expressed concern that VoP could disrupt batch file payment processing, though Tietoevry Banking disputes this. Because VoP verification occurs before a payment is initiated, it does not inherently delay batch transactions, and can in fact reduce the need for additional security checks downstream.
Tietoevry Banking is registered as an RVM provider with the EPC and, through a partnership with Movitz Payments, manages payee and payer identity confirmation on behalf of banks, alongside advanced file handling for corporate and retail customers.