GLOBAL PAYMENTS KNOWLEDGEISO 20022 / SWIFT / SEPA / MT / MX
PAYMENTSSIGNAL

The interactive academy for the standards, messages, and rails that move money.

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Verification of Payee, then instant transfer

Before an instant euro transfer can settle, the payer's bank checks the payee's name against the account and warns the payer if it does not match — then, on a match, the payment settles in seconds.

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Contributor Shubham Mathure

STEP 1 / 8MESSAGE

Riya sets up the payment

Riya (payer) → Bank Alfa (payer PSP)

Riya enters Arjun's name and IBAN and asks to send EUR 480.00 instantly. Nothing has moved yet — this is only the instruction being prepared for a check.

Step 1 of 8: Riya sets up the payment

  1. 01Message
    Riya sets up the paymentRiya (payer) → Bank Alfa (payer PSP)
  2. 02Message
    Bank Alfa asks Nordbank to verify the nameBank Alfa (payer PSP) → Nordbank (payee PSP) · VoP request
  3. 03Message
    Nordbank returns the check resultNordbank (payee PSP) → Bank Alfa (payer PSP) · VoP response
  4. 04Message
    A match is shown and Riya confirmsBank Alfa (payer PSP) → Riya (payer)
  5. 05Posting
    Bank Alfa debits RiyaBank Alfa (payer PSP)
  6. 06Message
    Bank Alfa submits the instant transferBank Alfa (payer PSP) → TIPS (instant settlement) · pacs.008
  7. 07Settlement
    The banks settle in central bank moneyBank Alfa (payer PSP) → Nordbank (payee PSP)
  8. 08Posting
    Nordbank credits Arjun within secondsNordbank (payee PSP)
MESSAGECLEARING OBLIGATIONSETTLEMENTPOSTING
Full step-by-step text (works without JavaScript)
  1. 01Message
    Riya sets up the paymentRiya (payer) → Bank Alfa (payer PSP)

    Riya enters Arjun's name and IBAN and asks to send EUR 480.00 instantly. Nothing has moved yet — this is only the instruction being prepared for a check.

  2. 02Message
    Bank Alfa asks Nordbank to verify the nameBank Alfa (payer PSP) → Nordbank (payee PSP) · VoP request

    Verification of Payee (VoP) checks the payee name against the IBAN before the payment is authorised. Bank Alfa asks Nordbank whether the name Riya typed matches the account. This is identity verification, not a movement of money.

  3. 03Message
    Nordbank returns the check resultNordbank (payee PSP) → Bank Alfa (payer PSP) · VoP response

    Nordbank compares the submitted name with the name registered on the account and answers MATCH, CLOSE MATCH, or NO MATCH. It is a warning signal for the payer, separate from sanctions screening and from any movement of funds.

  4. 04Message
    A match is shown and Riya confirmsBank Alfa (payer PSP) → Riya (payer)

    The result is MATCH, so Bank Alfa tells Riya the name fits the account and she confirms the payment. VoP is a fraud and misdirection control that runs before money moves; the decision to proceed stays with the payer.

  5. 05Posting
    Bank Alfa debits RiyaBank Alfa (payer PSP)

    With the check passed and the payment confirmed, Bank Alfa books the debit on Riya's account. Her money has left her account, but nothing has yet moved between the banks.

    • DR Riya's current account at Bank Alfa — EUR 480.00
  6. 06Message
    Bank Alfa submits the instant transferBank Alfa (payer PSP) → TIPS (instant settlement) · pacs.008

    Bank Alfa converts the confirmed instruction into an interbank pacs.008 flagged for the instant scheme and sends it to TIPS, the instant settlement infrastructure.

  7. 07Settlement
    The banks settle in central bank moneyBank Alfa (payer PSP) → Nordbank (payee PSP)

    TIPS moves the amount between the banks' positions in central bank money the instant the transfer is accepted. Only now has money actually moved between Bank Alfa and Nordbank — the VoP message earlier carried no funds.

    • DR Bank Alfa position at TIPS — EUR 480.00
    • CR Nordbank position at TIPS — EUR 480.00
  8. 08Posting
    Nordbank credits Arjun within secondsNordbank (payee PSP)

    Nordbank books the credit and Arjun can use the money immediately. The transfer is complete end to end: name verified, Riya debited, banks settled, Arjun credited.

    • CR Arjun's current account at Nordbank — EUR 480.00

What this simplifies: One VoP round trip and one instant settlement leg. Exact name-matching rules, response-time limits, and the routing/directory service behind VoP are set by the scheme rulebook and are omitted.

LEARN THE CONCEPTS BEHIND THIS FLOW

Sources for this flow2
  1. Scheme-specific ruleversion 1.1 (EPC218-23)

    Verification Of Payee scheme rulebook ↗ — European Payments Council

    Governs the EPC Verification Of Payee scheme under which PSPs check a payee's name against the account identifier before a credit transfer is sent. · Checked 2026-07-12

    The first rulebook version entered into force on 5 October 2025; version 1.1 was published in March 2026 to address issues found after deployment, and the EPC has announced a version 2.0 for later in 2026.

  2. Simplified educational illustration

    Payments Signal editorial teaching models — Payments Signal

    This site's own simplified teaching models. · Checked 2026-07-12

    What this simplifies: The VoP request and response are shown as a single round trip to one payee bank; matching logic, response timing, and routing details are defined by the EPC VoP scheme rulebook and omitted here.

    Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.