Verification of Payee & LEI

What EU banks need to know ahead of the October 2025 Instant Payments Regulation deadline

On 9th October 2025, the EU Instant Payments Regulation (IPR) comes into effect for all Eurozone payment service providers (PSPs). At its core is the Verification of Payee (VoP) requirement: banks must confirm that a beneficiary’s name matches the IBAN before executing a payment.

With payment fraud in Europe on the rise and instant payments becoming the norm, this change represents one of the most significant transformations in EU banking compliance in recent years.

What is changing under the EU Instant Payments Regulation?

The regulation mandates that:

  • Eurozone PSPs must support IBAN–name checks by 9th October 2025.
  • Non-Eurozone PSPs must comply by 9th July 2027.

This means every European bank must integrate Verification of Payee into its instant payments infrastructure — ensuring error-free transactions and reducing exposure to IBAN fraud.

Why Verification of Payee matters for EU banks

While instant payments bring speed and efficiency, they also increase fraud risk. Fraudsters exploit “close matches” between names and IBANs to misdirect funds. Manual interventions delay transactions and undermine the idea of “instant.”

By combining IBAN with the Legal Entity Identifier (LEI), banks and treasurers can achieve exact matches:

  • Match: the payment executes instantly.
  • No match: a fraud alert triggers immediate review.

As Clare Rowley, GLEIF, explains:

“The LEI provides a unique, standardized identifier for legal entities. When used for beneficiary identification, the LEI eliminates the risk of misdirected payments due to incorrect IBANs or fraudulent invoices.”

The role of LEIs in EU Verification of Payee compliance

As Guillermo De la Fuente, SwissTreasurer, notes:

“What’s the best way to be sure when you onboard a new supplier that the account is effectively theirs? Before IBAN name-check via LEI, there was nothing 100% bulletproof or effective.”

LEIs in instant payments are already familiar under EMIR reporting and securities regulation. Extending their use to payments ensures:

  • Fraud prevention – removing ambiguity and “close matches.”
  • Automation – eliminating manual processing delays.
  • Regulatory compliance – aligning with EU Instant Payments Regulation and G20 cross-border payments roadmap.
  • Trust – providing a global, standardised, regulated organisation identity layer.

Looking ahead: Verifiable LEI (vLEI) and the future of secure instant payments

Beyond LEIs, the verifiable LEI (vLEI) will bring cryptographic assurance linking accounts and owners. These innovations will make real-time payee verification tamper-proof, strengthening fraud prevention in cross-border instant payments and future-proofing EU banking operations.

Call to Action for EU banks

Banks preparing for IPR compliance should act now:

  • Ensure your institution and clients have valid LEIs.
  • Integrate LEI–IBAN matching into your instant payments processes.

Speak to RapidLEI today about how LEIs help European banks meet the Verification of Payee requirement and strengthen fraud-prevention strategies.

Learn more about EU Instant Payments and LEIs