knowledge 27 August 2025 |

Are you VOP to go? Prepare for Verification of Payee by October 2025

The Instant Payments Regulation¹ (the “IPR”) requires certain Payment Service Providers (“PSPs”) to offer a Verification of Payee (“VOP”) service to their Payment Service Users (“PSUs”). The date for VOP implementation is 9 October 2025.² Significantly, while requirements under the IPR relating to the receipt and sending of instant credit transfers have a phased application for Electronic Money Institutions (“EMIs”) and Payment Institutions (“PIs”)³, the VOP compliance requirement does not have such a similar phased application for EMIs and PIs located in the euro area.

Significantly, the VOP compliance requirement also applies to both instant credit transfers and standard credit transfers.

Background

The IPR was published in the Official Journal of the European Union on 19 March 2024, and it came into force on 8 April 2024.

Under the IPR, PSPs that offer the payment service of sending and receiving credit transfers, and that are located in an EU Member State whose currency is the euro (including Ireland), are required, amongst other things, to offer PSUs a payment service of sending and receiving instant credit transfers. As noted above, there is a phased implementation timeline for EMIs and PIs.

VOP Compliance Requirement

All EU-based PSPs (banks, EMIs and PIs) that offer the payment service of sending and receiving credit transfers will fall within scope of the obligation to offer the payer a service ensuring VOP. The VOP compliance requirement will apply to PSPs, including EMIs and PIs, located in the euro area from 9 October 2025. EU PSPs located outside the euro area are required to offer a VOP service from 9 July 2027.⁴

The VOP compliance requirement envisages that the payer should confirm the name and payment account identifier of a payment counterparty before executing a payment. In practice, this means that the requesting PSP will have to engage in a consultation process with the responding PSP before sending the requested payment to the specific account number of the payment counterparty.

As noted above, the VOP compliance requirement applies to both standard and instant credit transfers.⁵ In addition, the VOP service is required to be offered free of charge to the payer.⁶

Failure to correctly execute the VOP service may incur an obligation to refund the payer. The liability can lie with the payer’s or the payee’s PSP, depending on who is responsible for the failure to comply. Separately, the IPR provides that EU Member States shall lay down penalties for infringements of the IPR (which would include, for example, failure to offer the VOP service to customers). Such penalties were to be set out by each EU Member State by 9 April 2025, and are to be “effective, proportionate and dissuasive”.⁷ To date, the European Union (Requirements for Credit Transfers and Direct Debits in Euro) (Amendment) Regulations 2025 have been published, which transpose specific penalties for contraventions of separate requirements under Article 5d IPR (Screening of PSUs by PSPs that offer instant credit transfers to verify whether a PSU is a person or entity subject to targeted financial restrictive measures).

VOP Scheme

Given the technical processes required to execute VOP, there is a strong need for standardisation amongst PSPs offering the VOP service, and interoperability of VOP solutions. The European Payments Council (the “EPC”) has published the VOP Rulebook, which is a set of rules, practices and standards relating to VOP (the “VOP Scheme”). The VOP Rulebook will be effective from 5 October 2025 (shortly before the go-live of the VOP compliance requirement on 9 October 2025).

The VOP Scheme, operated by the EPC, is a set of “rules, practices and standards to achieve interoperability for the provision and operation of verifying Payment Account Numbers and Names of the Payment Counterparties, between Participants of the Scheme prior to initiating a Payment Account-based Payment within the Single Euro Payments Area.”

The VOP Scheme allows PSPs in the Single Euro Payments Area (“SEPA”) to offer a SEPA-wide VOP service to PSUs who intend to initiate a Payment Account-based Payment to a Payment Account within SEPA.

In practice, we anticipate that applicant participants to the VOP Scheme would already be participants in a separate EPC scheme (such as the EPC SEPA Credit Transfer scheme).

VOP participants’ services based on the VOP Scheme must be available 24 hours a day, every day of the year. In addition, VOP participants are required to have terms and conditions in place with customers governing the provision and use of the VOP service. This means that terms and conditions may need to be updated to cover the VOP service.

Routing and/or Verification Mechanisms

In terms of the infrastructure and operating processes required to provide the VOP service, participants in the VOP Scheme are free to choose between operating processes themselves, outsourcing (partially or completely) to third parties, or entering into bilateral or multilateral agreements with VOP Scheme participants.

We anticipate that PSPs will generally use the services of scheme-compliant Routing and/or Verification Mechanisms (“RVMs”) to send VOP requests to return related VOP responses to other PSPs. A list of RVMs in the VOP Scheme is available here.

How can we help?

In practice, we anticipate that PSPs intending to offer the VOP service may require assistance with:

application to the VOP Scheme;
appointment of appropriate RVM and necessary contractual arrangements;
updates to customer terms and conditions; and
ongoing compliance with IPR and VOP Scheme requirements.

McCann FitzGerald LLP is a premier law firm in Ireland and advises on the full range of legal, tax and compliance activities undertaken by PSPs in Ireland. We have substantial experience in successfully guiding applicants through the regulatory authorisation process and in helping them to comply with their legal obligations, once established. If you require assistance navigating the new compliance requirements under the IPR, or any other requirements, please get in touch with one of the key contacts below.

Also contributed to by David O’Keeffe Ioiart

Regulation (EU) 2024/886.
Article 5c(9) (Verification of the payee in the case of credit transfers), as inserted into the SEPA Regulation (Regulation (EU) No 260/2012) by the IPR.
Requirements apply to EMIs and PIs from 9 April 2027.
Article 5c(9) (Verification of the payee in the case of credit transfers), as inserted into the SEPA Regulation by the IPR.
Article 5c (Verification of the payee in the case of credit transfers) and Article 5b (Charges in respect of instant credit transfers), as inserted into the SEPA Regulation by the IPR.
Article 5b(2) (Charges in respect of instant credit transfers), as inserted into the SEPA Regulation by the IPR.
Article 1(3), as inserted into the SEPA Regulation by the IPR.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.