Tackling Payment Fraud: Using the LEI in Instant Payments for Payee Validation

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Instant payments are both immediate and irrevocable. Therefore, corporate treasurers must remain highly vigilant to the risk of payment fraud. Validating payee information is a critical aspect of the risk management process.

When the Legal Entity Identifier (LEI) is included as a data attribute for a supplier in a payment order, the beneficiary legal entity can be precisely, instantly, and automatically identified across borders. Payment service providers can efficiently leverage the LEI for confirming payee information rather than relying on manual processes involving trade names, IBANs, or account number cross-checks, all of which are slow and prone to human error.

LEI validation ensures that each transaction includes a unique identifier for the beneficiary, along with an account number, confirming that the payee is who they claim to be. Corporate treasurers can then easily verify that the supplier details match those they have on file for the payee. By using the LEI, enhanced transaction security and a reduced risk of payment fraud are not only possible but also straightforward.

Read more on how the LEI can enhance account-to-account (A2A) owner information in cross-border payments here.

Read more about the benefits of the LEI for corporate treasurers here.