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The European Payments Council has published updated recommendations for its Verification of Payee scheme, seeking to reduce unnecessary payment friction while improving consistency in how banks assess whether beneficiary details match before a transfer is initiated.
EPC Tightens Verification of Payee Matching Rules
The EPC has published version 2.0 of its matching recommendations, which sit alongside version 1.1 of the Verification of Payee Scheme Rulebook, effective since 20 September 2026.
The recommendations explain how responding payment service providers should prepare and compare beneficiary names when determining whether a request should return a Match, Close Match or No Match result.
The changes are important because Verification of Payee is now a core control within SEPA payments, intended to reduce fraud and human error by checking that the name entered by the payer corresponds with the account being credited.
Character Handling Becomes a Practical Issue
One of the more technical areas addressed by the EPC is character conversion.
Inter-PSP API messages must generally use a limited Latin character set transported through UTF-8, which means some names containing regional or non-standard characters may need to be converted into simpler forms before comparison.
The new guidance sets out how PSPs and Routing and/or Verification Mechanisms should handle those conversions, including cases where characters fall outside the permitted set.
This matters because inconsistent transliteration can create false mismatches even where the payer has entered the correct beneficiary.
Matching Rules Become More Flexible
The recommendations also provide more detail on how institutions may assess minor differences in names.
PSPs can take into account spelling errors, transposed letters, initials, phonetic variations and commonly accepted abbreviations. For companies, commercial names may also be considered alongside registered legal names.
The objective is to prevent overly rigid matching from generating unnecessary Close Match or No Match responses and introducing friction into the payment journey.
That balance is particularly important because overly permissive matching could undermine fraud controls, while overly strict matching risks frustrating legitimate users.
Banks Still Retain Responsibility for the Outcome
The EPC is not imposing a single matching algorithm across Europe.
Responding PSPs remain responsible for the verification result and retain discretion over the criteria they apply.
That flexibility allows banks to reflect their own systems and risk models, but it also means consistency across the market will depend heavily on how closely institutions follow the recommendations in practice.
The direction of travel is clear: Verification of Payee is moving beyond simple name checking towards a more sophisticated identity-matching layer, with the challenge now to improve accuracy without adding unnecessary friction to instant and account-to-account payments.
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