SEPA instant payments and Verification of Payee: what the Instant Payments Regulation changes for businesses

What the regulation requires

Regulation (EU) 2024/886 amended the SEPA Regulation to make instant credit transfers in euro widely available. Payment service providers that offer standard euro credit transfers must also offer instant credit transfers, with funds made available to the payee within ten seconds of the payment order being received.

Charges for instant credit transfers may not be higher than charges for standard credit transfers of the same kind. The regulation also changed how sanctions screening is done, requiring providers to check their customers against EU sanctions lists at least daily instead of screening each instant transaction individually.

For payment service providers in the euro area, the obligation to receive instant credit transfers applied from 9 January 2025, and the obligation to send them applied from 9 October 2025. Later dates apply to member states outside the euro area and to certain categories of providers.

Verification of Payee

The regulation also introduced a service commonly called Verification of Payee. Before a payer authorises a credit transfer, the payer’s bank must check whether the payee name provided matches the name associated with the IBAN held by the payee’s bank. In the euro area this applied from 9 October 2025, for both instant and standard euro credit transfers.

The payer receives one of several outcomes: a match, a close match with the correct name shown, no match, or a notice that the check could not be performed. The payer can still decide to proceed, but if they do so after a warning, the bank is generally not liable for the payment going to the wrong account. If the bank fails to provide the service, it can be liable.

Business customers submitting multiple payment orders as a package, such as payroll or supplier batch payments, can opt out of the check for those batches, and many companies weigh that against the fraud protection it provides.

Why businesses should care

Verification of Payee is aimed at authorised push payment fraud and misdirected payments, such as invoice fraud where criminals send fake bank details. It gives payers a warning when the name does not match the account.

The side effect is that inconsistent names cause friction for legitimate businesses. A company whose invoices use a brand name, while its bank account is held in the full legal entity name, may find customers receiving no match or close match warnings. Some customers will pause payment, ask for confirmation or pay late.

Invoices

Show the exact legal name of the account holder alongside any trading name, with the IBAN.

Customer portals

Display payee details consistently in payment instructions and order confirmations.

ERP and accounts payable

Store supplier legal names exactly as held by their banks, not abbreviations.

Group structures

Make clear which entity receives payment where several group companies invoice.

Change communication

Tell customers in advance when bank accounts or receiving entities change.

Opportunities from instant payments

Instant credit transfers settle in seconds and around the clock. For e-commerce, marketplaces and service businesses, payment options based on instant bank transfers can confirm payment immediately, which supports faster delivery or service start without card fees. Account-to-account payment methods built on open banking and instant transfers become more attractive as bank coverage improves.

For B2B companies, instant payments can speed up cash collection when combined with clear payment requests, such as QR codes or payment links with pre-filled reference information. They also change expectations: customers may expect refunds and payouts as quickly as they can pay.

Instant payments are irrevocable once executed. Businesses paying out refunds, commissions or supplier payments instantly need strong controls, including approval workflows, bank detail change verification and use of Verification of Payee for individual payments.

System changes to plan

Finance and IT teams should review how legal entity names and bank details are stored and shown across ERP, billing, e-commerce and CRM systems. Supplier onboarding should capture the account holder name exactly, ideally verified, and changes to bank details should trigger independent confirmation.

Payment files and bank integrations may need updates to handle Verification of Payee responses, instant payment status messages and exceptions. Reconciliation processes built around daily batch statements may need to handle payments arriving at any time of day.

Check with banks which services and interfaces they provide, what charges apply, and how batch opt-outs work. This article is a general overview and not legal or financial advice.

Where this sits in what we do

This article covers one decision inside a wider engagement. The solution page sets out how that engagement runs, what it includes and what it costs to find out.

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