Banks should act now to cut risk and enhance their payment services, as payments go instant

explains Nicoline Lilletvedt, Lead Offering Manager at Tietoevry Banking.

Instant payments are taking over globally – and Europe is no exception. Already accounting for more than 40% of all payments by value in Asia [1], instant payments are projected to grow at more than 35% Compound Annual Growth Rate (CAGR) world-wide, accounting for one in three payments by 2030. In Europe, instant payments have grown by a factor of 20 over the last seven years, according to Ernst and Young [2].

To help banks manage this shift, the European Payments Council (EPC) has developed a regulatory timetable for all SEPA payments (SCT and SCT Inst, the instant payment standard). Highlights include the mandate for banks to be able to receive all forms of SEPA payment this month (together with sanction screening), and the ability to send all forms of SEPA payment by October 2025.

These requirements add to the raft of regulations banks are coping with at present, from the EU’s Digital Operations Resilience Act (DORA) this year through to the third payment services directive (PSD3) expected in 2027.

Verification of Payee: a vital anti-fraud measure

As instant payments proliferate, fraudsters are exploiting low consumer familiarity to develop new scams and fraud vectors that threaten market confidence. In Sweden, for instance, digital payment identity scams have reached record levels, with one independent estimate putting the size of fraud at 2.5% of the country’s GDP [3].

In the UK, Authorized Push Payment (APP) fraud, in which consumers are duped into paying fake merchants by fraudsters, reached £239.3 million in the first half of 2023, with 80% occurring through bogus app payments [4].

To combat such fraud, Verification of Payee (VoP) systems have been mandated across the EU by October 2025. These systems enhance payment security – as well as the accuracy of payments – by verifying payee details before transactions happen. As well as reducing fraud risk, this also dramatically cuts the number of misdirected payments.

In the Netherlands, where VoP has been in force since 2018, banks report an 81% reduction in all-cause fraud and a 67% drop in misdirected payments.

However, operating VoP services in real time (typically less than 5 seconds) is a complex task, and one in which banks hold multiple roles and responsibilities including the requirement to share data with other banks party to the transaction.

This represents a change of role for the banks, in that they are now required to function as both a bank and a tech company routing information between different parties.

RVM: facilitating Verification of Payee

The introduction of Routing and Verification Mechanisms (RVM) as part of the SEPA Inst mandate will help banks manage many of the challenges associated with VoP. RVM services help banks to reduce complexity and risk by managing requests and responses between banks, supporting adherence to SCT Inst from a regulatory perspective, maintaining API interfaces and matching payee and payer names in-transaction. They also help banks connect with the EPC’s Directory Service (EDS), which underpins VoP across the EU.

Given the complexity of these tasks, it will come as no surprise that banks almost universally want to find partners that can help them manage RVM services. At Tietoevry Banking, we have secured EPC registration as a provider of RVM services for VoP solutions.

Thanks to our partnership with Movitz Payments, we are able to manage confirmation of identity for both payers and payees on banks’ behalf – adding an extra layer of security for both banks and their customers.

As part of our RVM service, we manage both requests and responses across transactions, as well as advanced file handling capabilities that help banks manage the diverse requirements of corporate and individual customers. This can include, for instance, processing corporate payments in batches, where a large number of payees need to be identified in real time.

Alongside the capacity to deliver unparalleled levels of security and convenience to clients through our RVM services, banks also have the opportunity to add on individual capabilities they require, thanks to our flexible and modular software solutions.

Meeting the fraud challenge with VoP and RVM

Banks will face significant challenges as the various SEPA compliance deadlines approach over the next eighteen months, from upgrading their systems to managing new fraud risks associated with instant payments – all at a time when they are coping with the introduction of DORA and preparing for PSD3. As payments go instant all over the world, it’s never been more important for corporate treasurers to ensure secure, error-free transactions and reduce misdirected payments to a minimum. 

VoP is a powerful tool for reducing fraud, cutting misdirected payments and delivering faster and smoother payment experiences for clients of all kinds. Introducing RVM services alongside VoP helps banks to manage complexity – while their specific requirements for additional services can be included thanks to the flexibility of Tietoevry Banking’s solutions.

With more than 30 years of delivering innovative, tailored financial software solutions to clients in over 22 markets, Tietoevry Banking is a trusted, registered provider of RVM services – as well as a recognized expert in the implementation of SEPA SCT, SCT Inst, VoP and other payment technologies.

To find out more about how RVM services help simplify and speed up VoP implementations while reducing fraud and delivering better customer experiences, contact:

Nicoline Lilletvedt Lead Offering Manager at Tietoevry Banking Connect on LinkedIn E-mail: nicoline.lilletvedt@tietoevry.com

Learn more about VoP:

Enhancing payment security with Verification of Payee

Tietoevry Banking secures European Payments Council registration for routing and verification services

^{[1] The World Bank, October 2023: “The Future of Fast Payments”: https://fastpayments.worldbank.org/sites/default/files/2023-10/
[2] E&Y, 6 January 2025: “Five EU instant payments hurdles for banks to clear”: https://www.ey.com/en_gl/insights/financial-services/emeia/eu-instant-payments-regulation-five-key-hurdles-for-banks-to-clear
[3] Fortune, 21 June 2024: “How going cashless turned Sweden into a high-crime nation”: https://fortune.com/europe/2024/06/21/why-going-cashless-has-turned-sweden-from-one-of-the-safest-countries-into-a-high-crime-nation/
[4] UK Finance, [January 2024], “Criminals steal over half a billion pounds”: https://www.ukfinance.org.uk/news-and-insight/press-release/criminals-steal-over-half-billion-pounds-and-nearly-80-cent-app}