New Real-Time Payment Regulation in Germany from Oct 5, 2025
Starting October 5, 2025, a new real-time payment regulation (EU No. 2024/886) will be implemented in Germany. This change aims to prevent incorrect transfers due to typographical errors or fraud. The German Pension Insurance has already adapted by waiving the IBAN name check for pension payments.
The regulation introduces a 'verification of payee' process. Before finalizing a transfer, the system checks the recipient's IBAN and account holder's name for a match. This process results in three levels: Match, Nearly match, or No match. If there's a match, the transfer proceeds as usual. If not, customers can still authorize the transfer but do so at their own risk.
Incoming payments may cause problems if the account is not in the recipient's name or there are discrepancies. If the recipient's information is not accurate during deposits, errors can lead to incorrect transactions. The sender may be held liable if funds are sent to the wrong recipient, as banks are not responsible for such mistakes. To avoid potential issues, it is recommended for payment recipients to check that all their provided information is correct.
From October 5, 2025, the real-time payment regulation will be in effect. While it aims to prevent incorrect transfers, customers can still authorize transfers even if the IBAN and recipient's name do not match. However, they do so at their own risk. Other institutions may have different regulations regarding the recipient's check.
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