New Real-Time Payment Regulation in Germany: What Recipients Need to Know
Starting October 5, 2025, a new real-time payment regulation (EU No. 2024/2025) will be implemented in Germany, affecting SEPA and real-time transfers. This regulation will check the recipient's details, IBAN, and account holder's name to prevent incorrect transfers. However, this could cause issues for some payment recipients, particularly those receiving payments to accounts not in their name.
From October 2025, banks will be required to verify the recipient's name and IBAN during the 'Verification of Payee' process. This means that payments such as retirement benefits, unemployment benefits, or housing allowance could be delayed, rejected, or returned if the recipient data does not exactly match. Recipients are advised to ensure their name matches exactly at the bank and with relevant authorities, notify parties of name changes, and regularly check payment receipts to avoid issues.
The German Pension Insurance has decided to waive the IBAN name check for pension payments, ensuring they will be transferred as usual despite minor discrepancies in the name. However, customers can still authorize a transfer even if the IBAN and recipient's name do not match, but they do so at their own risk. It remains uncertain whether this regulation will remain in place long-term and if it applies to other institutions.
The implementation of this regulation could cause problems for some payment recipients, particularly those receiving payments to accounts not in their name. Starting October 5, 2025, the real-time payment regulation will be in effect, checking the recipient's details, IBAN, and account holder's name to prevent incorrect transfers. A review of the payment process may occur, which could take a few days and potentially cause issues with recurring debits. The verification process will result in three levels of match: exact match, partial match, or no match.
