The European Union is going to change money transfers between banks and they will no longer be as we knew them. Starting this Thursday, October 9, banks will have to check that the name of the recipient to whom the money transfer is directed matches the IBAN number, before carrying out any transfer. In this way, the European Commission, led by its president Ursula von der Leyen, seeks to prevent fraud that impersonates bank accounts, a problem that has not stopped increasing with the rise of digital payments in recent years.
This new measure comes to fight against the increasingly recurrent monetary frauds, of which even the Civil Guard already warns, since they happen daily through all types of media (SMS, email or even WhatsApp). This is caused by the greater ease of paying that digital platforms allow us today, since we use less and less cash and pay more with our mobile phone through an app or Bizum.
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So much so, that in Spain online fraud linked to bank transfers and impersonations has skyrocketed. Criminals no longer attack ATMs and banks, but rather emails or payment platforms using techniques such as ‘phishing’. For this reason, security has become one of the priorities for banking entities and digital payment platforms.
How bank transfers change and why
Starting this month, every time a bank transfer is to be made, entities will have to check that the name of the recipient to whom the money transfer is directed so that it matches the IBAN number. This was not the case before, since when we made a transfer, the bank only verified that the IBAN was correct. That is, the name was not verified with the account’s IBAN.
Previously, the name of the beneficiary remained just another piece of information, with no practical relevance in the transfer. That will now change, because if the data does not match, the entity must notify the client before completing the operation and give them the option to cancel it, as an extra security measure.
End to ‘man in the middle’ banking scam
One of the most repeated scams in bank transfers and which it is intended to put an end to thanks to this new rule is the so-called ‘man in the middle’. This is a fraud in which a criminal intercepts emails or invoices and changes the account number to keep the money. Through the new modus operandi in transfers, the bank will detect this mismatch and will be able to notify before it is too late.
He Regulation (EU) 2024/886 imposes this new system that forces financial entities to implement this verification, both in ordinary and instant transfers. Although this represents a significant technical challenge, since banks will have to adapt their systems to match names and IBANs without slowing down payments.
However, this measure comes to improve our daily lives, since, although it may seem like a minor detail, this verification can avoid many problems. Thanks to it, both companies and individuals will be able to avoid economic losses caused by deception or manipulated emails. Ultimately, sending money will still be just as fast, but it will have an extra layer of security that will help keep scammers under control.