PwC Strategy& study

IBAN-name checks can increase confidence in instant payments, but are not a universal solution

Munich (ots) - - Instant payments are becoming more popular in Europe, but at
the same time attract fraudsters

- In future, according to draft EU legislation, banks should therefore check
before every payment whether the IBAN and account-holder name match

- Banks and payment service providers take a nuanced view of the proposal

IBAN-name checks can help to increase the attractiveness of instant payments
within the EU, notably by increasing trust in the new mode of payment. But in
order to effectively combat attempts at fraud and to bring about greater
acceptance of instant payments Europe-wide, they need to be supplemented by
further measures. Any possible standardization should, at the same time, be open
to solutions already established in individual countries and aim at efficient
implementation. These are the findings from the study "IBAN-name check: Current
developments and concepts" co-authored by Strategy&, PwC's global strategy
consulting business , together with Oesterreichische Nationalbank (Austrian
National Bank, OeNB) , Deutsche Bundesbank , and the Euro Banking Association
(EBA) . For the study, 17 representatives of European banks, public institutions
and IBAN-name check providers were interviewed.

IBAN-name checks just the first step

Instant payments are being used with increasing frequency within the Eurozone.
At the same time, this payment method can also favor fraud. Accordingly, a
legislative proposal from the European Commission envisages the mandatory
introduction of IBAN-name checks, in order to counteract this and increase
confidence in this mode of payment. Before every instant payment, a background
check is performed as to whether the IBAN and account-holder name match. Above
all, this check should partly combat Authorized Push Payment (APP) fraud, where
fraudsters induce their victims to transfer funds to what is ostensibly a known
account, but which in reality is one controlled by the fraudsters. According to
the results of the study, IBAN-name checks can make a significant contribution
to increasing confidence in instant transfers and ensuring a good user
experience. At the same time, almost all the experts interviewed emphasize that
IBAN-name checks alone cannot significantly drive down instances of fraud.

"Since the bank fraudsters' methods are continually evolving, IBAN-name checks
can only be one strategic component in a series of further measures developed by
banks and payment service providers themselves. Legislative initiatives like the