On Thursday, October 9, a requirement will come into force across Europe, according to which, before executing a payment, the payer — a financial institution — is obliged to conduct a compliance check of the name or title of the recipient and the account number, representatives of the Bank of Latvia informed the LETA agency.
The verification of the name and account number is an additional security element aimed at ensuring that the payer receives an informational notification about the results of the compliance check before confirming the execution of the payment, thereby reducing the risk of fraud and errors. This process should take no more than five seconds.
The received compliance notification will not affect the payer's right to make a payment based on the initially entered recipient's details. The decision to execute or not execute the transfer in case of non-compliance remains the responsibility of the payer.
Payment service providers are required to conduct the name and account number compliance check before authorizing the payment by the payer. It includes verifying the compliance between the specified recipient's bank account number (IBAN) and the name, title, or other identifier, such as the payer's VAT registration number or Legal Entity Identifier (LEI).
The check will be carried out before each payment order, even if transfers are made to the same recipient multiple times or repeated as a standard credit transfer after a refusal to execute an instant payment. However, it will not be conducted in cases where the payer is not the initiator of the recipient's details (for example, when the account number and recipient's name are obtained from a registry of phone numbers and bank accounts).
The Bank of Latvia explains that the implementation of this check will enhance security and reduce the risk of fraud, especially in cases where fraudsters alter the account details and provide a familiar recipient's name to the payer while substituting their account number with their own.
This requirement will apply to intra-bank transfers, traditional transfers to clients of other banks, and instant payments.
The Bank of Latvia is one of two central banks in the Eurozone providing a service for verifying the compliance of the name or title of the recipient with the specified account number (IBAN) and, starting from October 5, 2025, will ensure access to its instant verification platform for interested payment service providers from other European countries. Latvian financial institutions will be able to choose their payment verification service provider independently.
