Instant payments drive shift to pre-transfer account verification

By Vriti Gothi

The rapid growth of instant payment systems across the Americas is driving a structural shift in how financial institutions manage risk, with account verification increasingly positioned as a core control before funds are transferred, the Prometeo report explains.

As real-time rails become the default for consumer and business transactions, the window to detect and correct errors has largely disappeared. Payments that once moved over hours or days now settle within seconds, leaving limited recourse when funds are sent to the wrong account or diverted through fraud. Industry analysts note that this change is forcing banks and FinTechs to move risk controls upstream, toward the point of payment initiation.

Account verification—often referred to as payment pre-validation—confirms that a destination account exists, is operational, and, where required, belongs to the intended beneficiary. While historically treated as a secondary or optional control, it is increasingly viewed as a design requirement for modern payment infrastructure rather than a compliance feature.

The shift reflects the growing exposure created by instant and irreversible settlement. Once a transfer is completed, recovery typically depends on manual processes and third-party cooperation, resulting in higher operational costs, customer disputes, and reputational risk. At the same time, authorized push payment scams and simple data-entry errors continue to generate losses in high-volume environments.

Industry frameworks now distinguish between three levels of verification: confirming that an account exists, confirming that it is active and able to receive funds, and validating that the account holder matches the intended recipient. Ownership validation—commonly delivered through name-matching capabilities—has become particularly important for high-value or first-time transactions. Rather than automatically blocking payments, mismatches typically trigger additional confirmation or risk-based controls, allowing institutions to balance security with user experience.

The move toward pre-payment validation is already embedded in several mature markets. The United Kingdom’s Confirmation of Payee system has become standard across major institutions, while the European Union introduced Verification of Payee requirements for SEPA transfers in 2025. Similar principles have been incorporated into U.S. federal payment processes, where destination accounts must now be validated before disbursement.

Evidence from early adopters suggests tangible benefits. In the Netherlands, real-time IBAN-name verification contributed to a sharp reduction in both transfer fraud and payment errors within three years of implementation.

Across the Americas, operational data indicates that adoption is accelerating rapidly. Average account verification volumes grew by more than sixfold year-on-year between 2024 and 2025, reflecting a transition from pilot deployments to production use. Mature markets such as Brazil and Mexico are embedding verification into high-volume payment flows, while countries including Colombia, Chile, and Peru are scaling implementations at a pace.

The United States has also recorded significant growth, signaling broader convergence toward prepayment risk controls as instant payment usage expands.

For financial institutions, the implications extend beyond fraud prevention. Account verification is being applied across multiple use cases, including payroll and gig payouts, remittances, loan disbursements, marketplace settlements, corporate supplier payments, and recurring collections. By identifying incorrect or mismatched accounts early, organizations can reduce failed transactions, operational rework, and customer complaints while improving confidence in digital payment channels.

Industry outlooks suggest the Americas will follow a phased trajectory, with private-sector adoption leading in the near term, followed by gradual regulatory alignment and potential mandates toward the end of the decade.

As payment systems continue to accelerate, the balance between speed and security is being redefined. Increasingly, the industry consensus is that real-time money requires real-time certainty—making pre-payment account verification an emerging foundational layer of trust in the global payments ecosystem.