iPiD Publishes Essential Guide for Payment Service Providers: “Verification of Payee: The Race to Compliance”

Finance

Singapore – April 4th,2024 – iPiD, a leading payment validation solutions provider, today announced the publication of a pivotal whitepaper, “Verification of Payee: The Race to Compliance,” authored by CEO Damien Dugauquier. This comprehensive guide offers Payment Service Providers (PSPs) an in-depth analysis and actionable strategies to comply with the European Verification of Payee (VoP) mandate by October 2025. The paper is now available on the iPiD website at www.ipid.tech/verification-of-payee-the-race-to-compliance.

The VoP mandate represents a significant evolution in payment security, setting new standards to prevent misdirected payments and shifting liability from payers to PSPs. iPiD’s whitepaper outlines the technological, operational, and strategic adjustments necessary for PSPs to achieve compliance, emphasising the importance of interoperability, open data services, and the integration of secure API endpoints across the European payments ecosystem.

Authored by Damien Dugauquier, the whitepaper encapsulates insights from a distinguished panel of contributors, reflecting a wealth of experience across the financial and technological landscapes. The contributors include:

Christian Sarafidis, Chief Executive EMEA Financial Services at Microsoft, shares insights on the digital transformation and cloud integration journey within the banking sector, highlighting the advantages of Azure for modern banking solutions.
Jeroen Holscher, Global Head of Payment Services at Capgemini, discusses the critical aspects of VoP integration within banking channels from both the payer and payee perspectives, emphasising data quality and fraud prevention.
Eran Vitkon, Head of Open Banking Solutions at Finastra, highlights the partnership with technology providers like iPiD and the role of innovative solutions in combating fraud within instant payment processes.
Ed Metzger, VP of Payments Efficiency at LexisNexis® Risk Solutions, provides a global perspective on the VoP proposals’ impact on fraud prevention, emphasising a strategic approach for banks and corporates.
Laurent Sarrat, CEO and Co-Founder of Sis ID, offers insights into the VoP’s application for large companies, stressing the importance of a unified approach to fraud detection and detailed analysis of bank detail validation.
Frans C. van Beers, Senior Policy Consultant Payments at the Dutch Payments Association and Chair of the CoP (VoP) Task Force at the European Payments Council (EPC), elaborates on the standardisation efforts for VoP interoperability within SEPA, highlighting the establishment of a VoP Rulebook aimed at fostering efficient processing across markets and ensuring interoperability between PSPs.
Vitus Rotzer, Chief Revenue Officer at Bottomline, brings to light the journey of the UK’s Confirmation of Payee service and its efficacy in reducing APP fraud, providing a benchmark for the VoP mandate’s success and future enhancements.

With the Verification of Payee mandate, we stand at a critical juncture in enhancing payment security and integrity across Europe,” said Damien Dugauquier, CEO of iPiD. “Our whitepaper not only guides PSPs through the compliance journey but also illuminates the path towards leveraging these changes for developing premium payment security solutions. It’s a testament to the collaborative effort of leading industry experts to fortify the payment ecosystem against fraud.”

The whitepaper provides a roadmap for PSPs, detailing the steps for compliance within the next six months, including reviewing core banking capabilities, engaging with local payment systems, and leveraging specialist providers for streamlined VoP implementation.

For additional information or to schedule an interview with iPiD’s CEO, please contact

iPiD Communications Team

Email: media@ipid.tech

Website: www.ipid.tech

About iPiD

iPiD is a fast-growing, venture-backed fintech start-up that was founded in late 2021 by a global team who have held senior roles at major payments and technology companies, including SWIFT and Thomson Reuters. In addition to our HQ in Singapore, our global team has representatives in the Americas, India, Belgium, Malaysia, Netherlands, South Africa, Spain, and Vietnam.

iPiD’s vision is to make cross-border payments easy, secure, and seamless.

We achieve this by partnering with financial services providers (banks, payment systems, payment fintechs, wallets…) to deliver an addressing data platform that helps the payment industry to provide a more efficient and user-friendly payment journey. With a focus on simplicity, security, and speed, iPiD is dedicated to breaking down the barriers in international payments, making global transactions as easy as local ones.

iPiD is built for all – we do not replace banks, payment fintechs, wallets or remittance companies; nor do we replace existing payment rails.

Whitepaper Abstract

In the evolving landscape of European payments, the introduction of the Verification of Payee (VoP) mandate represents a significant shift towards enhancing payment security. This whitepaper delves into the comprehensive strategies required for Payment Service Providers (PSPs) to align with the VoP requirements set forth by the European Regulators. With a compliance deadline of October 2025, the mandate necessitates the implementation of cross-verification services to ensure the accuracy of payee names against banking records, thereby mitigating misdirected payments and shifting liability from payers to PSPs. This document outlines the technological and operational adjustments PSPs must undertake, including the development of name-matching algorithms, the integration of secure API endpoints for inter-PSP communication, and the selection of aggregators to facilitate a pan-European VoP network. It emphasises the challenges and opportunities presented by the liability shift and the imperative for PSPs to adopt an interoperable, open data service approach to VoP, leveraging lessons from the UK’s Confirmation of Payee model and aligning with the European Payments Council’s guidelines for a seamless, secure payment ecosystem.

Key Takeaway Points

Mandatory Compliance by October 2025: PSPs are required to implement cross-verification services that align with the Verification of Payee (VoP) mandate, aiming to enhance payment security across Europe.
Liability Shift and PSP Obligations: The regulation introduces a liability shift from payers to PSPs for defectively executed payments, necessitating PSPs to build capabilities for querying payee data, implementing name-matching algorithms, and ensuring secure inter-PSP communication.
Interoperability and Open Data Services: Successful VoP implementation hinges on interoperability across PSPs, requiring an open data service model that facilitates seamless, secure verification processes, drawing from the UK’s Confirmation of Payee model and the efforts of the European Payments Council.
Technological and Operational Adjustments: PSPs must undertake significant technological and operational adjustments, including the development of secure API endpoints, selection of aggregators for European-wide connectivity, and the integration of VoP across all banking channels.
Challenges of Liability Shift: The document explores the challenges introduced by the liability shift, particularly around the risks of incorrect matches and the unavailability of VoP services, advocating for a pragmatic approach to managing these liabilities.
Opportunities for Enhanced Payment Security: Beyond compliance, PSPs have the opportunity to leverage VoP to design premium payment security solutions, offering additional functionalities to corporate customers and enhancing overall fraud prevention measures.
Strategic Recommendations for PSPs: The whitepaper concludes with strategic recommendations for PSPs over the next six months, including reviewing core banking capabilities, engaging with local payment systems, and leveraging specialist providers like iPiD for streamlined VoP implementation.