On 10th October 2024, the European Payments Council (EPC) published the long-awaited Verification of Payee (VoP) rulebook as part of the SEPA Instant Payment Regulations (IPR). This rulebook aims to standardize how European banks implement VoP – a service that confirms payee account information to help protect consumers against fraudulent transactions.
However, this significant update brings challenges that European banks and Payment Service Providers (PSPs) must navigate. Pelican.ai, with its cutting-edge AI and machine learning-based payment solutions, offers practical tools to help overcome these hurdles.
5 key challenges and how Pelican AI's Solutions can help
- Tight Deadlines for Compliance
Banks must have a VoP solution across all payment channels by 5th October 2025, ahead of the Instant Payments Regulation. The need to build a new pan-European VoP infrastructure adds to the pressure, especially since banks only have a short period to test their systems after the EPC Directory Service (EDS) becomes operational in June 2025.
How Pelican.ai Can Help
Pelican.ai’s agile, cloud-native platform enables rapid deployment of VoP services, allowing banks to develop and integrate solutions ahead of time. Its modular, API-driven architecture supports quick adaptation to the EDS and accelerates compliance, giving banks a head starts in implementing and testing their systems efficiently.
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- Extended Verification Timeframes
While the VoP rulebook extends the verification window from 3 to 5 seconds, this remains a challenge for responding banks to build the matching algorithms and manage volume of incoming requests.
How Pelican.ai Can Help:
Pelican.ai’s real-time AI-powered verification engine ensures high-speed payee validation with AI based intelligent matching using multiple configurable algorithms tuned to the requirements of the responding bank. With its scalable infrastructure, Pelican.ai processes verifications within the stringent 5-second window, providing seamless, instant verification regardless of the transaction volume or channel.
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- Managing Bulk-Payment Files
Handling VoP for bulk payments, such as payroll, requires individual verification for each transaction, even in large batches. The complexity of delivering real-time responses for each entry within the bulk file adds to operational challenges.
How Pelican.ai Can Help:
Pelican.ai’s bulk-payment processing solution is designed to handle high volumes of transactions with precision. Its efficient and scalable platform processes bulk files rapidly, ensuring individual verifications are completed efficiently and providing intelligent handling of match, close match, and no match responses received from responding banks. This enhances operational efficiency.
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- Integrating VoP into Existing Systems
Many banks have long-established systems in place for handling SEPA transactions, making it challenging to integrate VoP functionalities without disrupting current processes.
How Pelican.ai Can Help:
Pelican.ai offers seamless integration with existing payment systems, thanks to its flexible API and AI-driven platform. It enables banks to incorporate VoP capabilities into their current SEPA processes with minimal disruption. The platform’s machine learning algorithms also enhance accuracy, ensuring smooth interactions and minimizing the need for system overhauls.
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- Routing and Verification Mechanisms (RVM)
While the EDS will serve as a centralized directory for payee information, it will not manage the actual routing or verification of VoP requests. Banks need their own RVMs to connect with the EDS and manage VoP Requests and Responses.
How Pelican.ai Can Help:
Pelican.ai provides a comprehensive RVM solution that integrates seamlessly with the EDS. Its intelligent routing mechanisms ensure that VoP requests are handled efficiently, while its AI capabilities enhance the accuracy and speed of verification. By offering this fully integrated solution, Pelican.ai simplifies the entire VoP process, ensuring compliance and reducing operational complexity.
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Incorporating Pelican.ai’s advanced technology into your VoP strategy can help your institution stay ahead of the curve, comply with EPC’s stringent regulations, and enhance the efficiency and security of your payment systems.
About PelicanAI
Pelican AI is a leading provider of innovative financial technology solutions. With a focus on security, compliance, and customer experience, Pelican is committed to helping financial institutions navigate the complexities of the real-time digital age.
For further information please contact:
Pelican Marketing
Tel: +44 208 947 7200
Email: marketing@pelican.ai