How IPR impacts ALL credit transfers

The Instant Payments Regulation (IPR) stands as a landmark regulation aimed at revolutionizing the speed and efficiency of credit transfers within the European Union. It imposes Payment Service Providers the deployment of instant payments and a correlated adaptation of sanction screening measures on the one hand. But it goes beyond the sole instant payments as it imposes to implement the verification of payee for all credit transfers.

Key milestones: who, what and when?

The deadlines established in the Regulation are designed to ensure a progressive and effective implementation of the new obligations. The IPR enters into force on the 20th day following that of its publication in the Official Journal of the European Union. Yet, as this new Regulation is made of various and complementary elements and concerns different types of players, it is important to clarify to whom the different deadlines apply. 

Why do some obligations apply to ALL credit transfers?

The IPR amends the SEPA Regulation (n260/2012). Whereas the IPR title would suggest that those amendments solely apply to instant credit transfers, several obligations introduced by this new Regulation also apply to credit transfers which are not instant. It is for instance the case of the newly introduced Article 5c of the amended SEPA Regulation, which introduces an obligation to perform a verification of the payee in the case of credit transfers.

What is Verification of Payee (VoP) all about?

The Verification of Payee obligation is defined in the IPR as follows: A payers PSP shall offer the payer a service ensuring verification of the payee to whom the payer intends to send a credit transfer (service ensuring verification). The payers PSP shall perform the service ensuring verification immediately after the payer provides relevant information about the payee and before the payer is offered the possibility of authorising that credit transfer. The payers PSP shall offer the service ensuring verification regardless of the payment initiation channel used by the payer to place a payment order for the credit transfer. It is also mentioned that this service ensuring payee verification shall be provided:

• to all PSUs free of charge
• for single or bulk payments, regardless of the initiation channel

It is also important to note that the PSU can only opt out from the service if it is (i) not a consumer (ii) that is submitting bulk payments.  

Discover LUXHUBs Payee Verification Platform

At LUXHUB, were providing PSPs with a solution that enables to perform the verification of payee, to ensure safe(r) credit transfers in euro. Our Payee Verification Platform enables PSPs to comply with this new obligation on the one hand, but also, in the future, to monetize such a service.