Instant Payments Name-Check: The Truth About Security, False Matches & What To Do
What Is IBAN–Name Check — and Why Now?
The new IBAN–name verification adds a pre-send warning if the account name you typed doesn’t match the name on the destination IBAN. It’s designed to stop invoice-swap and misdirection fraud, and it sits on top of the instant-payments reform. For the full instant-payments picture, see our pillar: EU Instant Payments: Deadlines, Fees & IBAN Check.
- Match: send with confidence.
- Close match: small differences (accents, spacing) — review and confirm.
- No match: stop, re-verify with the payee, or cancel.
How IBAN–Name Verification Works: Match, Close Match, No Match
- String rules: banks compare your entry to the beneficiary name on file (case/spacing/diacritics handling varies).
- Thresholds: “close match” triggers a caution but usually lets you proceed; “no match” shows a stronger warning.
- You decide: it’s a warning, not a block (unless your bank chooses to hard-block by policy).
- IBAN: international bank account number used in SEPA.
- SCT Inst: SEPA Instant Credit Transfer (≤10s, 24/7).
- Beneficiary: the account holder receiving funds.
- False positive: legitimate payee flagged as mismatch.
- Override: user chooses to send despite a warning.
False Matches Warning: Accents, Long Names & Trading Styles
- Diacritics: Štěpán vs Stepan, Łukasz vs Lukasz.
- Legal vs trading name: “ACME s.r.o.” vs “ACME Kitchen”.
- Abbreviations/suffixes: GmbH / s.r.o. / a.s. / Ltd.
- Extra characters: middle names, commas, & ampersands.
“Name-check only works if the friction is visible. Give a blunt match/no-match signal and people stop fraud; bury it in fine print, and you’ve engineered silence—not safety.”
Security Gains vs New Risks: The Truth About Scams
- Stops common frauds: invoice swaps, typo-IBANs, social-engineering of payee details.
- New angle for scammers: push you to override a warning (“it’s our holding company, just send”).
- Operational risk: if banks hide or soften warnings, users learn to ignore them.
When It Flags: Quick Steps to Fix or Cancel (Simple Checklist)
- Pause. Do not send on “no match”.
- Compare details. Re-open the invoice/contract; copy–paste the legal name exactly.
- Call back on a known number. Don’t use numbers on the suspicious invoice.
- Ask for a €1 test payment. Confirm receipt and the exact account name returned.
- Update your beneficiary book. Save the verified legal name to avoid future flags.
- Still unsure? Cancel and request a fresh, signed payment instruction.
Refunds & Liability: Who Pays If You Ignore the Warning?
Banks log whether a warning appeared and if you overrode it. That audit trail matters later. If you proceed despite a clear “no match,” you may carry more liability in disputes.
| Warning text | Likely cause | Fix before sending | What to keep |
|---|---|---|---|
| “Close match: check spelling” | Accents, spacing, extra punctuation | Paste exact legal name from invoice/registry | Screenshot warning + revised details |
| “No match: beneficiary differs” | Wrong IBAN or wrong company/account | Call verified contact; request €1 test | Email confirmation from payee; test-payment proof |
| “Service unavailable” | Bank API or registry outage | Wait/retry; avoid sending blind | Timestamp of outage; retry result |
SME Edge Cases: Bulk Payments, Payroll, Marketplaces
- Bulk/payroll: normalize names in your CSV/API (no nicknames, keep suffixes consistent).
- Vendor master data: store the verified legal name + IBAN for each supplier.
- Marketplaces: ensure sub-merchant legal names are surfaced to payers.
- Shared IBANs: payment processors may return umbrella names — warn users in the invoice.
The Bottom Line: Proven Safeguards Banks Must Implement
- Visible, plain-language warnings (no jargon, no tiny fonts).
- Reason codes (close vs no match) + clear next steps.
- Audit trail of warnings/overrides for disputes and refunds.
- Rate-limit overrides: repeated ignores should slow the flow, not hide the warning.
- Will my bank block a “no match”? Usually it warns; some banks hard-block by policy.
- Do accents matter? Yes — many systems normalize, but not all.
- Company vs brand name? Use the legal name linked to the IBAN.
- Ignored a warning and sent? Contact your bank immediately; provide evidence.
- Can scammers bypass this? They try — by pressuring you to override. Don’t.