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Is a Confusing IBAN Name Check Halting Your Payment? A Surprising Guide to SEPA’s New Rules.
Since October 2025, banks in the European Union have a new job. When you send money using a SEPA transfer, your bank must now check if the recipient’s name matches the bank account number (IBAN). This system is called Verification of Payee (VoP). Its goal is to protect you from fraud and sending money to the wrong person by mistake.
Your bank talks to the recipient’s bank to compare the details you entered. It then gives you a simple signal to tell you if the information is correct.
The Traffic Light System for Your Transfers
Think of the check like a traffic light. Your bank will show you a green, yellow, or red light before you approve the payment.
- Green (Match): The IBAN and name are a perfect match. You can be confident your money is going to the right account.
- Yellow (Close Match): The name you entered is similar, but not exact. Your bank might show you the correct name. For example, you wrote “Jon Smith” but the account is under “Jonathan Smith.” You should review this carefully before proceeding.
- Red (No Match): The IBAN and name do not match. The system will not show you the correct name for privacy reasons. It is safest to stop and cancel the transfer.
Who Is Responsible for Mistakes?
This new system changes who pays for errors. Understanding this is key to protecting your money.
If your bank shows a green light but the transfer still goes to the wrong account, your bank is generally responsible for the loss.
However, if your bank shows a yellow or red light and you approve the payment anyway, you become responsible. If the money is lost, the bank is not required to refund you. This makes it very important to pay close attention to any warnings.
Why Transfers Are Failing
Many people have had problems with this new check. The main reason is that different banks have implemented the system in different ways. An error on one banking app might not appear on another.
Common reasons for a mismatch include:
- Capitalization: Your bank may see ANNA MILLER and Anna Miller as different names.
- Missing Middle Names: The account may be registered with a middle name, but you did not include it.
- Company Names: Using “Co” instead of “Company” or “Ltd” instead of “Limited” can cause a failure.
- Typos: A simple spelling mistake will almost always result in a red light.
The best approach is to ask the person or business you are paying for the exact name registered to their bank account. Copying it precisely is the safest way to ensure your transfer goes through smoothly.