Verification of Payee – The Reality: Not Everyone is Ready
This article is written by Cobase The EU’s Instant Payments Regulation is reshaping the financial landscape at record speed. By late 2025, every bank and payment service provider in the eurozone must be able to receive instant payments, and by early 2026, they must be able to send them. On paper, this sounds like progress: faster, cheaper, safer payments for all. In practice, the rapid timeline is creating strain across the industry. The downside of forced adoption Not every player in the payments ecosystem is ready for this shift. Many banks still operate on legacy infrastructure, not built for real-time, round-the-clock processing. For them, upgrading systems to handle instant payments, fraud checks, and sanctions screening within seconds is a massive task. Vendors face a similar challenge. Some are rushing to bolt instant-payment functionality onto old platforms, creating patchwork solutions that may not scale or stand up to regulatory scrutiny. Corporates, meanwhile, are caught in the middle. Treasury teams must adapt their workflows, manage liquidity in real time, and—critically—ensure that their master data is accurate. The risk is clear: if corporates and banks aren’t fully prepared, they may be tempted to look for “opt-outs” or backdoors in the regulation to buy more time. But regulators have made it clear: there is no going back. Instant payments and Verification of Payee (VoP) are here to stay. Why verification of Payee is the pressure point The Regulation doesn’t just mandate instant payments—it makes Verification of Payee mandatory. That means before a transfer is processed, the account name must be checked against the IBAN, and mismatches must trigger a warning. This sounds simple, but the operational impact is huge: For banks and corporates, this is where the regulation bites hardest. Without strong VoP tools, the risk of fraud, error, or compliance failure grows. Why verification The regulation is coming fast, and not everyone is ready. But the answer isn’t to delay or to water down compliance. The answer is to adopt solutions that make instant payments both safe and sustainable. For corporates, this isn’t just about checking a regulatory box. It’s about safeguarding payroll, protecting supplier relationships, and keeping treasury operations running smoothly. For banks, it’s about maintaining customer trust in an environment where money moves in seconds. Cobase’s role is to provide the tools to make this transition possible—helping clients stay compliant, avoid backdoors, and operate securely in the new real-time payments world. Conclusion The pressure is real. The Instant Payments Regulation is forcing banks, vendors, and corporates to modernize faster than many expected. But cutting corners isn’t an option. With Verification of Payee built into every step of the payment process—master data, bulk files, single transfers, and address books—Cobase ensures clients stay both compliant and protected. Instant payments are becoming the standard. The real question is: will your systems, data, and processes be ready? With the right solutions, the answer can be yes—without compromise. Frequent Asked Questions (FAQs) 1. What is the Instant Payments Regulation? The Instant Payments regulation is new EU legislation that makes instant payments mandatory across the euro area. By late 2025, all banks and payment service providers holding euro accounts must be able to send and receive instant transfers 24/7. 2. Why were instant payments not widely available before? Although SEPA Instant Credit Transfers (SCT Inst) were introduced in 2017, participation was optional. Some banks adopted the scheme quickly, but many did not. As a result, instant payments were common in some countries but almost unavailable in others. 3. How does Verification of Payee (VoP) work? Verification of Payee checks whether the name of the beneficiary matches the IBAN before a transfer is processed. If there’s a mismatch, the sender is warned. This helps reduce fraud and prevents costly errors before the payment leaves the account. 4. What risks do corporates face with instant payments? Instant transfers are irreversible. Errors in supplier details, outdated employee data, or fraud attempts can cause money to be lost in seconds. Without accurate master data and fraud-prevention controls, corporates are more exposed to risk than with traditional, slower payments. 5. How should businesses prepare for instant payments? Corporates need to ensure their payment processes, ERP data, and fraud controls are ready for a real-time environment. This means cleaning up master data, implementing strong verification measures, and adopting technology that supports instant and secure payment flows. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
Franklin
Why working capital matters more than ever
This article is a contribution from our content partner, Kyriba Economic uncertainty. Supply chain disruptions. Rising inflation. Shifting consumer demands. Today’s financial landscape is anything but predictable. For businesses, these challenges are more than just economic headlines—they’re daily hurdles that require strategic planning and agility. Amid this turbulence, one factor has become a lifeline for businesses trying to stay resilient and seize growth opportunities: working capital. By effectively managing and optimizing working capital, companies can maintain liquidity, operate efficiently, and position themselves for long-term success. This blog will explore what makes working capital so critical in today’s economy, break down its components, and offer actionable strategies to optimize it. Why working capital is a game-changer in today’s economy Working capital is no longer just a financial metric on a balance sheet. It’s a strategic tool that helps businesses adapt to disruption, capitalize on opportunities, and ensure operational stability. Today, liquidity is the new currency of resilience. Here’s why working capital plays a pivotal role: Breaking Down the Components of Working Capital Working capital management revolves around optimizing the Cash Conversion Cycle (CCC)—a foundational metric that measures how quickly a company can turn its investments in inventory and resources into cash flow from sales. The three levers of the CCC are: Optimizing these three components is challenging, especially in a globalized landscape with multiple ERPs, business units, and jurisdictions at play. Advanced analytics and digital financial platforms are essential for real-time visibility, scenario planning, and agility. Real-world example: Bray International The scale of the challenge is clear: in our recent CFO survey, more than 70% of finance leaders across key global markets, including the US, UK, Japan, and France, expressed concern about the impact of supply chain issues on their organizations’ financial health and outlook. In France, that figure reached 80%. The message is clear: volatility is not a passing phase, but a defining feature of today’s business landscape. To see how optimizing working capital can drive resilience, take a lesson from Bray International. When tariffs disrupted trade relations in the U.S., Bray could have reacted defensively. Instead, they took proactive measures like diversifying manufacturing locations and leveraging liquidity for strategic investments. By adopting data-driven decision-making and scenario planning, they managed to not only mitigate risks but also turn uncertainty into competitive advantage. Their agility underscores the importance of working capital in dynamic environments. Strategies for Optimizing Working Capital Managing working capital effectively is a strategic imperative. Here are actionable steps your business can take today: Overcoming challenges in working capital management While working capital optimization is essential, businesses face unique challenges that make it difficult to maintain. Here are some common hurdles: Rising inflation Higher costs for raw materials, labor, and logistics directly impact purchasing power. Businesses must adopt efficient procurement processes and limit cost variability. Supply chain disruptions Extended lead times and increased inventory holding costs have made efficient inventory management more critical than ever. Strategies like nearshoring and alternative supplier sourcing can offer relief. Stricter credit terms Suppliers tightening credit terms puts additional financial pressure on businesses. Companies need to negotiate better payment terms and explore financing options to reduce strain. Turning uncertainty onto opportunity Today’s volatile conditions have raised the stakes for working capital management. While the challenges may seem daunting, businesses that view uncertainty as an opportunity for strategic growth can thrive where others retreat. By focusing on receivables, inventory, and payables, and leveraging technology and strategic insights, businesses can free up cash, reduce costs, and position themselves for long-term success. From financial flexibility to strategic advantage Working capital is no longer just a financial metric. It’s a lifeline for businesses navigating modern volatility and an enabler of strategic growth. Companies that treat it as an enterprise-wide priority will emerge stronger, more competitive, and better equipped to seize the opportunities hidden within disruption. Now’s the time to reimagine how your organization manages its cash flow. With proactive strategies and the right tools, you can transform working capital from a routine financial consideration to a strategic lever for success. Read more from Kyriba Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.