Penny Drop Verification is Sumsub's document-free data verification solution designed to deliver a real-time API connection to customer banking information on a pan-European level through a nominal monetary transfer.

The solution is based on the Payment Initiation Service (PIS) under the EU/EEA open banking technical infrastructure, which allows authorized Third Party Providers (TPPs) to securely access consolidated information from a customer's payment account in 28 countries and over 550 financial institutions. As a result, Penny Drop Verification covers over 90% of the adult population in each supported jurisdiction, as it successfully represents all residents that have an active account in any one of the available banks.

Penny Drop Verification solution works by simply having the applicant authenticate themselves on their selected banking platform via a standard login process and confirm a nominal payment to Sumsub's digital account, which is instantly processed and refunded shortly after. The result delivers comprehensive customer account ownership and transaction details, as well as a confirmation of their real-time presence in compliance with a range of use cases under the AML/CTF and the Revised Payment Services Directive (PSD2), including Identity, Payment Method, and Qualified Electronic Signature (QES) Verification.

Overall, Penny Drop Account offers one of the most well-recognized solutions to customer banking data verification that helps businesses achieve international AML/CTF and PSD2 compliance, prevent identity fraud, and optimize due diligence procedures, all through a seamless, document-free user experience.

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Note

• The open banking infrastructure under the Directive (EU) 2015/2366, officially referred to as the Revised Payment Services Directive (PSD2), is a technological and legal framework which mandates Account Servicing Payment Service Providers (ASPSPs) in the European Economic Area (EEA), including banks, credit institutions, and electronic money institutions, to allow authorized Third Party Providers (TPPs) access to financial customer data via application programming interfaces (APIs) on the basis of explicit customer consent. TPPs consist of Payment Initiation Service Providers (PISPs), Account Information Service Providers (AISPs), and Card-Based Payment Instrument Issuers (CBPIIs).
• Sumsub offers its solution by leveraging the Payment Initiation Service (PIS) through Volt, a licensed and PSD2-compliant PISP. As a result, Sumsub itself is not subject to the PSD2 regulatory obligations.
• All payment transactions are conducted using Sumsub's Virtual Account on the Volt platform by default. Clients that would like to set up and use their own Virtual Account with Volt should inform their Customer Success Manager about it. This option requires passing an additional due diligence process and executing a supplementary Service Agreement with Volt, Sumsub acting as the supporting intermediary. The process takes around 2-3 weeks to complete. Once the Virtual Account is created, Sumsub will use the client's API key to enable the solution.
• The solution currently facilitates connectivity to banking institutions that process Euro (EUR) currency transactions.
• The current nominal transaction amount is set to 0.10 EUR; however, this may be increased in the future, provided Sumsub encounters cases with banks that do not process such small transactions.

Use cases

Penny Drop Verification satisfies three primary use cases for Sumsub clients.

Solution benefits

Penny Drop Verification is valuable for all businesses enrolling new customers.

Key benefits of the Sumsub Penny Drop Verification solution include the following:

• Coverage. Reach verified records of over 90% of the national adult population in each of the 28 supported countries with the use of a single solution.
• Compliance. Meet international CDD and EDD requirements under AML/CTF, PSD2, and upcoming European regulatory mandates.
• Scalability. Onboard customers on a pan-European level, without having to comply with country-specific standards, such as ANSSI in France, SEPBLAC in Spain, and ADR in Romania.
• Conversion. Improve the speed and user experience of user verification in comparison to traditional methods, leading to a direct increase in both customer conversion and approval rates.
• Fraud Prevention. Verify customer data legitimacy, minimizing the risk of identity fraud, such as account takeover or illicit use of payment credentials via SCA and data cross-matching features.
• Seamless Integration. Seamlessly integrate Sumsub's solution into your system via our lightweight Mobile and Web SDK frameworks.

How Penny Drop Verification works

Sumsub's Penny Drop Verification is an advanced customer banking data verification solution that enables a real-time API connection to customer banking information on a pan-European level via a nominal monetary transfer.

Step-by-step product journey

1. Country and bank account selection. An applicant selects their country and preferred banking platform for verification.
2. Bank account login. The applicant logs into their bank account using Strong Customer Authentication (SCA).
3. Payment confirmation. The applicant authorizes a nominal payment, typically of 0.10 EUR, to be processed from their account.
4. Real-time presence. The relevant applicant identity and account data are retrieved to confirm the applicant's real-time presence.
5. Account ownership validation. Sumsub cross-checks the information to ensure a complete identity match and validates the account ownership.
6. Payment refund. The system automatically refunds the payment amount to the applicant.

Supported jurisdictions

The Penny Drop Verification solution is supported by the banks of the following jurisdictions:

Explore our Coverage Sheet for a full breakdown of ASPSPs enabled by our Penny Drop Verification solution within each jurisdiction for payment transaction and refund execution.

Compliance overview

The Sumsub Penny Drop Verification solution aligns with critical European regulatory frameworks, ensuring businesses meet compliance requirements while enhancing the security of financial transactions:

1. Identity Verification. Fully automated user onboarding in compliance with the national AML/CTF regulatory requirements for customer due diligence in Europe(see the breakdown by country below).
2. QES Verification in Germany. Under the requirements of the German Money Laundering Act (GwG § 12 (1) 3.), when a person's identity is verified by means of a Qualified Electronic Signature, the obliged entity is also required to ensure that a transaction is executed directly from a payment account, which is held in the name of the verified individual.
3. Payment Method Verification. Under the 4th Anti-Money Laundering Directive (Directive (EU) 2015/849), all regulated institutions whose operations involve payment transaction processing are advised to perform payment method ownership verification in order to combat both money laundering and the financing of terrorist activities. The Penny Drop Verification solution helps businesses ensure the legitimacy and ownership of the payer’s account, providing accurate identification and traceability of any executed transaction. This verification process plays a pivotal role in safeguarding the financial ecosystem against fraud and illicit activities.
4. Instant payment processing. All payment service providers (PSPs) in the Single Euro Payments Area (SEPA) are required to offer instant payment transactions as a standard service under the Instant Payments Regulation (Regulation (EU) 2024/886), ensuring they are as accessible as traditional SEPA Credit Transfers. The regulation will become applicable to all EU member countries in the eurozone in October 2025, as well as those outside of the eurozone in July 2027.

For more information on the solution compliance assessment, refer to this article.

Setup and configuration

The provided Penny Drop Verification solution scheme demonstrates the following:

• Interaction between Sumsub, our client, applicant, and the bank widget.
• Required and optional steps of the end-user journey.
• Overall solution functionality.

Penny Drop Verification FAQ

Find the most frequently asked questions about Penny Drop Verification.