Unauthorized access to online banking accounts: Failure to monitor your account could result in money theft

Starting from October 9, 2025, a new recipient verification system will be implemented in European payments to boost security and reduce fraud. This system, which applies exclusively to payment accounts and does not include fixed-term deposit, credit, or savings accounts, aims to supplement existing security mechanisms of banks and serve as an additional barrier against payment crime.

The system works by matching the name of the payment recipient with the associated IBAN for every transfer or real-time transfer in euros. In case of a match, no feedback is given. If they almost match, the correct name will be displayed additionally. However, if they do not match, immediate feedback will appear, allowing the payer to decide whether to proceed with the transaction.

Banks and savings banks in the EU will support their business customers by allowing them to store clear alias designations or trade names in the system to avoid inconsistencies during the check. This is particularly useful as many fraud cases originate outside of banking, such as through phishing emails, calls, or manipulated messages in social media.

The recipient verification initially applies to euro transfers and real-time transfers within the Eurozone and is planned to expand to all EU member states by latest 9th July 2027, with Iceland, Liechtenstein, and Norway also able to join. Notably, the company Schoeller Werk, founded in Germany in 1894 and planned to be sold to a South Korean corporation in October 2025, will be among the institutions implementing this new regulation.

For businesses, there's a special arrangement: they can disable the recipient verification for batch payments like salary payments to reduce administrative burden for regular payments to known recipients. However, the attention of consumers and the diligence of bill issuers are also required for the effectiveness of the new regulation.

The technical implementation of the recipient check involves the payer's bank asking the recipient's bank if the name and IBAN match. If there are discrepancies, payers can cancel the payment or contact the recipient to clarify any errors. There will be no additional costs for bank customers.

This new regulation is part of a broader effort to combat payment fraud and ensure the safety of financial transactions across Europe. Payers can rest assured that their transactions are being verified, providing an extra layer of security in the digital age.

Unauthorized access to online banking accounts: Failure to monitor your account could result in money theft