Payment rails
Verification of payee
Checking the destination account holder’s name before execution, to avoid a wrong irrevocable transfer.
The principle is to query the receiving institution for the name attached to the identifier entered, then compare it with the expected name. An exact match passes, a minor discrepancy raises a warning, a different name blocks.
In the euro area this check became mandatory under the instant payments regulation. On other rails — NIP in Nigeria, PIX in Brazil — it has existed from the start, built into the protocol. It is the only real protection on an instant, irrevocable rail, where no cancellation is possible afterwards.