The challenge: Confirmation of Payee requires data from external source. Consequently, adherence to the GDPR regulations that protect personal data has become a major obstacle in the process of the Confirmation of Payee (CoP).
Within the framework of the Revised Payment Service Directive (PSD2), Verification of Payee is required from all the parties to the transaction. This means that the originating PSP needs to obtain the payees’ information to verify the accuracy of the information provided by the payer.
However, the GDPR rules dictate that no personal data of banks’ customers may be shared without their authorization. Hence, account holders exercise control over the transmission of their personal data. This makes the CoP for outgoing payments unreliable since the counter party can’t ensure personal data sharing.
EPC has proposed and highlighted in their rule book the most viable solution for this challenge: Verification of Payee by Instant VOP Request sent by the Originator bank to the Beneficiary bank. Originator Bank communicates the intended payee’s information, and the payee’s bank verifies it against its list of accounts and sends the response back to the payer’s bank (Match/No-Match/Close Match).
The conceptual workflow is described in the EPC rule book, as follows:
Fincom’s Technological Solution for instant VOP
Fincom has developed exceptionally accurate and effective system for Account #/Accoun Holder and IBAN/Name verification, backed up by its accurate Name Matching.
It includes and fully supports:
- Instant VOP request or VOP request as part of the flow of Wires or Instant Payments
- Screening speed of <15msec
- Accurate name matching across 44 languages, in their original alphabets, facilitating local and cross-border payments and resolution of inconsistencies in name spelling and unstructured names.
The system performs immediate data processing without disrupting the payment flow, saving time, operational efforts, hassle, and costs.
It ensures seamless integration with payment systems (incoming or outgoing), core banking systems, CRMs, or other platforms, and supports REST and SOAP APIs.
