Luxembourg Financial Sector Successfully Implements Payee Verification System

ABBL reports smooth rollout with 60% of transfers correctly matched

The Association of Banks and Bankers Luxembourg (ABBL) has confirmed that the country’s financial sector has successfully managed the implementation of the new Verification of Payee (VoP) system, introduced on 9 October 2025. Despite significant technical challenges and limited preparation time, banks and payment providers in Luxembourg have adapted effectively, ensuring a smooth transition to the new process.

The Verification of Payee automatically checks whether the recipient’s name corresponds to their IBAN before executing euro transfers within the SEPA zone. The system aims to reduce transfer errors and strengthen protection against payment fraud by confirming that money is sent to the correct beneficiary.

According to the ABBL, around 60% of all transfers since the launch resulted in a complete match, meaning the recipient’s information was accurate and required no modification. About 19% of cases showed a close match, leading to name suggestions for users, while 14% produced a “No Match” alert, encouraging verification before proceeding. These discrepancies often occur due to the use of trade names, abbreviations, or acronyms that differ from official records. The ABBL has advised consumers to update their beneficiary lists using official Bank Identity Statements or invoice details.

In approximately 7% of transactions, verification was not possible, though payments could still be processed with caution. The association reminded users that while they remain free to validate such transfers, they assume full responsibility in the event of an error.

The average verification time for VoP stands at 149 milliseconds, highlighting the efficiency of Luxembourg’s banking systems. Minor challenges have been noted in transfers involving certain foreign countries, where readiness for VoP implementation has not yet matched Luxembourg’s standards.

Galina Miroshnichenko, payments and digital advisor at the ABBL, described the rollout as a step forward in terms of security and error reduction, but cautioned that the system is not an absolute safeguard against financial crime. She emphasized the importance of continued vigilance and maintaining good security practices.

The ABBL’s positive assessment reflects Luxembourg’s strong reputation for digital innovation and its ability to adapt quickly to European payment reforms while maintaining high standards of reliability and trust.

Read More : Beneficiary verification: 60% of transfers in Luxembourg were successful - The bottom line