How to Validate Payer Information in a Payment

Why It Matters

Accurate and complete payer information is essential for compliance with payment regulations such as FATF Recommendation 16, Regulation (EU) 2015/847, and the UK Money Laundering Regulations. Missing or poorly formatted data can lead to rejected payments, regulatory findings, or even de-risking by correspondent banks.

What You Need to Validate

Before executing a payment, the following payer information must be present and verifiable:

Full Name of the payer (no pseudonyms, initials, or aliases)
Account Number (or a unique transaction identifier if no account is used)
At least one of the following:
- Full Address — including street, city, and country
- Official Personal Document Number — such as a passport or national ID number
- Customer Identification Number (assigned by the PSP, if applicable)
- Date and Place of Birth

Note: If a simplified regime applies (e.g. under EUR 1,000 and not linked), reduced information may be permitted—but only where permitted by local regulation.

Step-by-Step Validation Process

Red Flags to Watch For

Name mismatches between internal systems and payment message
Generic or clearly fictional addresses
Repeated payment messages missing key data from the same payer
Payments from newly onboarded customers with insufficient verification

When to Escalate

If payer data is incomplete and cannot be quickly validated:

Pause or suspend the transaction pending clarification
Escalate to compliance for risk assessment
Reject if there is sufficient risk or if regulatory expectations cannot be met

Summary

Validating payer information isn't just a data-entry task—it’s a frontline compliance control. Ensuring completeness and accuracy protects your institution, builds trust with correspondent partners, and meets the expectations of global regulators. Make validation part of your standard pre-processing checklist and document your actions accordingly.