The Luxembourg Bankers' Association (ABBL) has announced that from Thursday 9 October 2025, Luxembourg banks will enhance the speed and security of euro transfers thanks to two major developments.

According to the ABBL, the enhancements are a result of the adoption of instant payments - making funds available within seconds, 24 hours a day, seven days a week - and the implementation of the Verification of Payee (VoP) system, which will “reduce the risk of fraud and error”. 

The ABBL said: “These advances, coordinated by the Association of Banks and Bankers in Luxembourg (ABBL), aim to protect customers and simplify their day-to-day payment transactions. Pay, reimburse, receive everything becomes instantaneous.”

The ABBL noted that instant transfers offer considerable time savings and convenience for individual customers. In just a few seconds,

the money is available in the beneficiary's account, 24 hours a day, 7 days a week. In practical terms, this means one can immediately reimburse a friend or family member after dinner at a restaurant, transfer money to a child studying abroad in case of an emergency or pay a bill urgently to avoid late fees. Instant payment also facilitates second-hand purchases between individuals: when selling via a platform or between neighbours, the buyer can make the payment immediately and the seller is guaranteed to receive the funds straight away.

Since 9 January 2025, payment service providers must be able to receive instant transfers in euros in all eurozone countries. And from 9 October 2025, they will also have to be able to issue them, including Verification of the Payee (IBAN/name). This service combines security, speed and convenience, fully adapting to everyday needs.

In regard to the enhanced security against fraud, the ABBL stated that fraud involving transfers has risen sharply in recent years, affecting both individuals and businesses. To better protect consumers, the Verification of Payee will automatically check that the recipient's name matches their IBAN before executing a standard or instant transfer in euros within the SEPA zone.

With the implementation of this system, users will receive a message similar to the following for each transfer:

• Match: the data matches — the transfer can be confirmed without modification;

• Close Match: partial match — a name suggestion is provided;

• No Match: the data does not match — an alert is displayed, prompting verification;

• Verification not possible: the verification service could not be performed for a technical reason, for example — the transfer can be processed, but with caution.

No Match or Close Match cases can be caused by the use of trade names, abbreviations or acronyms. However, the user is free to validate the transfer but assumes full responsibility in the event of an error. It should also be noted that the Verification of Payee only applies to the creation of new standing orders and the modification of existing standing orders. Existing standing orders that have not been modified are not affected.

To take full advantage of the Verification of Payee and reduce the risk of failure or error, the ABBL invites the public to follow several recommendations:

As a payer:

• ensure that the beneficiary name you enter matches the name on the beneficiary's bank account;

• use the name that appears on the account's bank details (RIB). If this is not available, use the name indicated next to the IBAN on the invoice or payment request. If in doubt, ask the beneficiary for the correct name to enter;

• to make things easier, consider updating the names in your list of registered beneficiaries today.

As a beneficiary:

• provide your contacts with the exact name that corresponds to your bank account. Share your bank account details (RIB);

Ananda Kautz, Member of the ABBL Management Committee, said: “The implementation of the Verification of Payee is based on a simple principle: payment security is everyone's business. As a payer or beneficiary, everyone has an active role to play in ensuring the integrity of transactions and strengthening confidence in electronic transfers.”

She added: “The Verification of Payee system requested by the European Commission is intended to improve the reliability of transfers and actively help prevent fraud through identity theft and input errors.”

The ABBL acknowledged the implementation of the Verification of Payee had posed a significant technological challenge for ABBL members, as they had to fundamentally adapt their payment systems to enable real-time, large-scale verification. The commitment to the change was accompanied by significant investments in infrastructure, interoperability and data security and underscored the banking sector's commitment to strengthening confidence in electronic payments while maintaining high execution speeds.

Businesses and institutions can find more details at https://www.abbl.lu/en/home/verification-of-payee-vop-what-to-expect-and-how-to-prepare