Payee Verification in a Fragmented Landscape: Why North America Needs a Unified Approach

Whether we talk about instant payments, cross-border flows, or ISO 20022 adoption, the conversation always comes back to one fundamental question:

How do we ensure that the party receiving the funds is truly who they claim to be?

In North America, that question is becoming more urgent by the day. Not because the industry is lagging behind, but because it is evolving in multiple directions at once.

Modernization without a common foundation

Both the US and Canada are in the middle of significant payment transformation. Canada is progressing through initiatives like Real-Time Rail (RTR) and ISO 20022, aiming to create faster and more transparent payment experiences. In the US, innovation is happening across several payment rails simultaneously - ACH, FedNow, RTP, and wires - each advancing on its own path.

At first glance, this looks like progress. And it is. But underneath that progress sits a structural issue that is harder to solve:

There is no shared approach to payee verification.

Without that foundation, even the most modern infrastructure struggles to deliver what users ultimately expect: trust, predictability, and control.

A market shaped by fragmentation

Unlike Europe or the UK, where regulatory initiatives have driven the adoption of standardized verification frameworks, North America has evolved more organically. Different networks, institutions, and infrastructures have developed their own approaches over time.

In the US in particular, this has led to a highly fragmented landscape. Each payment rail operates with its own logic, its own data structures, and its own assumptions about verification. At the same time, there is no regulatory requirement pushing the market toward a single standard.

The result is a mix of overlapping solutions. Some are network-driven, like Kinexys by J.P. Morgan, which operates as a peer-to-peer, blockchain-based verification scheme. Others, such as Early Warning Services, focus on account validation and status checks, particularly in ACH and onboarding scenarios. The Clearing House provides directory-based capabilities tied to RTP flows, while NACHA’s Phixius offers an optional, consortium-driven approach to data exchange and account validation. Alongside these, large banks have started building their own proprietary verification services.

Individually, each of these solutions addresses a specific need. Together, they create a landscape that is difficult to navigate and even harder to unify.

Why this matters more than ever

Fragmentation is often described as a complexity issue, but its impact runs much deeper.

Misdirected payments are still a reality, not because the technology doesn’t exist to prevent them, but because it isn’t applied consistently. Fraud, particularly Authorized Push Payment fraud, continues to grow as real-time payments accelerate. Without reliable pre-validation, banks are left reacting after the fact rather than preventing issues before they occur.

At the same time, the customer experience becomes unpredictable. The level of protection a user receives depends on which rail is used, which bank they interact with, and which solution happens to sit behind the scenes. For the end user, this inconsistency translates into uncertainty - and uncertainty erodes trust.

For banks, the challenge is equally difficult. They can attempt to integrate multiple solutions, which quickly becomes complex and costly. They can build their own capabilities, which requires significant investment and ongoing maintenance. Or they can wait for a regulatory push, which may or may not come in the near future.

In practice, many are doing a combination of all three, which only increases fragmentation over time.

Canada: a similar path, just earlier

Canada is often seen as more coordinated in its modernization efforts, and to some extent that is true. However, when it comes to payee verification, the situation is not fundamentally different.

RTR and ISO 20022 are improving the infrastructure, but verification is not yet a mandated or standardized layer. As a result, banks are beginning to explore solutions independently, and the early signs of fragmentation are already visible.

The missing piece: interoperability

What North America lacks is not innovation. It is the ability to connect that innovation into a coherent whole.

Banks do not need another isolated solution. They need a way to navigate and access all existing ones without adding complexity every time a new scheme or network emerges.

A different way forward

Instead of waiting for a single standard to solve the problem, a more practical approach is emerging. One that focuses on unifying access rather than replacing existing solutions.

Movitz’s Global Payee Verification service is built around this idea. Rather than asking banks to choose between networks, it allows them to connect once and access many. Through a single API, institutions can integrate with multiple verification schemes. Whether they are blockchain-based, directory-driven, or API-based, while maintaining a consistent operating model across all payment types.

This approach shifts the conversation. The question is no longer which solution to pick, but how to make all of them work together.

From fragmentation to orchestration

Fragmentation in North America is unlikely to disappear anytime soon. But it does not have to be a barrier to progress.

By introducing a unifying layer, banks can move from managing complexity to orchestrating it. They can offer consistent verification experiences regardless of rail or geography, reduce operational risk, and protect customers before payments are executed.

Perhaps most importantly, they position themselves for the future - whatever form it takes.

Because whether regulation comes or new standards emerge, one thing is certain:

The need for trust in payments is not going away.