EOwing to a high service cost and the absence of verification of the recipient account, instant transfers are still little used in Europe. To develop it, the European Commission adopted on October 26, 2022 a settlement proposal went largely unnoticed.
This text aims to make instant payments in euros affordable, and to strengthen confidence by obliging Member States to deploy an account verification system (“Confirmation of Payee”, CoP) trans-European. However, this decision has worried some banks and some players in the financial security market, which have already invested large sums to develop national verification systems.
To fight against fraud in bank transfers, several French banks have in fact, since 2017, set up a system for verifying the identity of bank accounts. A European first.
Called Diamond, this device, based on messaging SEPAmail, allows a company or an individual to verify the membership of the bank account to its recipient. In other words, to verify that there is no identity theft and therefore a misappropriation of payment on a third-party account.
Tedious cross-border checks
Following this French initiative, other European countries followed suit, deploying their own CoP verification systems. First in the Netherlands on an initiative of Rabobank, then in England at the request of the regulator, which made the participation of all banks operating in the territory compulsory. Italy and Spain have also developed their own verification systems.
Each national system is made up of rules of use, processes and various modes of participation. Thus, some only include banks, others are extended to third-party organizations. This dispersion makes transnational checks tedious.
Another weak point: none of these systems is able to carry out verifications of instantaneous transfers. However, these payment methods are growing. In France, for example, in 2021 they represented nearly 62 million transactions compared to 45.5 million in 2020, for a total amount of 111 billion euros, according to the Observatory for the security of means of payment of the Banque de France.
With only 2.6% market share of payment methods in volume and 0.6% in value, these transfers are admittedly still marginal. The price of the service, the absence of verification of the recipient’s identity and the payment withdrawal time, reduced to a few seconds, are undoubtedly obstacles to their use.
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