Verification of Payee One Year On: What Changed for Rent Paid by Transfer

Óscar Raynaud· Head of Living, UrbanPay9 Oct 20264 min

On 9 October 2025, Verification of Payee became mandatory for SEPA transfers in the euro area. Before a payer authorises a transfer, their bank now checks whether the name they typed matches the name on the destination IBAN. The result is shown before they confirm: match, close match, no match, or check not possible.

One year on, the security benefit is clear. So is an unintended effect on rent collection that many operators still have not fixed.

What the first year shows

The check is working at scale. Latvia's central bank alone processed 57.4 million verification requests between October 2025 and February 2026. In a survey there, 68% of people had noticed the check, and half of those said it had helped them avoid an incorrect transfer.

The other side of the data matters for anyone receiving payments. UniCredit's figures for its German business from late 2025 to early 2026 showed around 85% match or close match, and about 15% no match. Common causes were names entered too briefly or simply incorrectly. Roughly one transfer in seven triggers the strongest warning a payer will see.

Why rent is especially exposed

A no-match warning does not block the payment. As Germany's IHK Nürnberg explains, the payer can still go ahead, but many will be unsettled, and delayed or abandoned payments and queries can follow. Living operators are particularly exposed for three reasons:

Brand name versus legal name. Residents know the building by its brand, but the account belongs to a company with a different legal name.
One company per building. Many portfolios hold each asset in its own company, so the payee name changes from building to building.
Manual transfers. Residents type the payee details themselves, often from an email or a PDF, so errors are common.

A resident who sees "no match" on a rent payment may stop, call the front desk, or pay late. Multiply that by hundreds of units and it becomes an arrears and workload problem.

How operators fix it

The fixes are simple once you know where to look:

Show the exact account holder name on every rent request, invoice and contract, not just the brand.
Register trading names with your bank where it supports aliases. The Irish banking federation advises businesses to make sure their trading name is registered and visible to their bank to avoid unnecessary mismatches.
Explain the check to residents in onboarding messages, including which legal entity they pay.
Remove manual entry altogether by moving residents to payments where the payee details are pre-filled.

The scheme is also extending. UniCredit notes that it applies to non-euro SEPA countries from July 2027, and that the updated rulebook adds the commercial trade name.

Where UrbanPay fits

With account-to-account payment initiation, the resident does not type a payee name or an IBAN at all. They approve a payment request in their own banking app, with the correct beneficiary and a structured reference already filled in. That removes the main source of no-match warnings and wrong references in one step, and each payment reconciles to the right unit automatically. Direct debit vs bank transfer vs A2A compares the options, and PSD3 and open banking covers what comes next for European payments.

FAQ

What is Verification of Payee?

An EU-wide check, mandatory in the euro area since 9 October 2025, that compares the payee name entered by the payer with the name on the destination IBAN before a SEPA transfer is authorised.

Does a no-match result block a rent payment?

No. The payer can still proceed, but the warning often causes hesitation, delays or abandoned payments.

How can landlords avoid Verification of Payee mismatches?

Show the exact account holder name on rent requests, register trading names with your bank where possible, explain the check to residents, and use payment methods where payee details are pre-filled.

Talk to Óscar

If you run a coliving, flex living, student housing or build-to-rent operation and want to see how collection, verification and contract signing fit together on your volumes, book 20 minutes with me or write directly.

Book 20 minutes with Óscar · [email protected] · Contact UrbanPay