Sumsub's Penny Drop Verification solution offers a scalable and efficient method for businesses to enhance the level of customer identification process security that helps them achieve regulatory compliance with national AML/CTF requirements on a pan-European level.

By leveraging a payment initiation service (PIS) as part of the open banking infrastructure, our solution enables both a recognized and seamless way to verify customer personal identifiable information, real-time onboarding presence, and bank account ownership via a direct connection to over 350 financial institutions.

The use of Penny Drop Verification in combination with other identity verification methods, such as Photo Identification and Qualified Electronic Signature allows you to meet the regulatory AML/CTF requirements for customer onboarding in a number of countries within the European region. As a result, businesses are not required to comply with country-specific identification standards, including those of ANSSI in France, SEPBLAC in Spain, or ADR in Romania.

The Penny Drop Verification works by simply having the user log into their banking platform and confirm a nominal payment to Sumsub’s or our client’s designated bank account as the final step of the complete onboarding journey.
The end result delivers a stamp of approval on the legitimacy of the user identity as well as their real-time presence, which enables businesses to build effortless Qualified Electronic Signature, Photo Identification, and Video Identification onboarding experiences in full compliance with customer due diligence obligations across the European region.

Use cases

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

Case 1: User onboarding

Penny Drop Verification lets you stay compliant with national AML/CTF regulations in the European Union, including France, Germany, Spain, Italy, and other countries:

Banks
Neobanks
Trading platforms
iGaming operators
Investment platforms
Credit unions
Brokerage firms
Insurance companies

Case 2: Qualified electronic document signing

Penny Drop Verification is part of the signing process. Thus, it facilitates the execution of high-value/high-risk operations that require the same legal power as a handwritten signature, especially in Germany:

Financial Services — credit applications, platform usage agreements, loan agreements.
Employment — employment contracts, vendor contracts.
Government — permits, tax returns.
Healthcare — patient consent forms, prescriptions.
Real Estate — property leases, sales agreements.

Case 3: Payment method verification

Penny Drop Verification adds to customer bank account data checks, including ownership, account number, and banking institution details:

Banks
Neobanks
Trading platforms
iGaming operators
Investment platforms
Credit unions
Brokerage firms
Insurance companies

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:

Compliance. Ensures full compliance with national AML/CTF regulations for customer onboarding in a number of EU member states, including the largest markets.
Scalability. Enables businesses to onboard customers on a pan-European level, without having to comply with country-specific identification standards, such as those of ANSSI in France, SEPBLAC in Spain, and ADR in Romania.
Conversion. Improves the speed and user experience of identification in comparison to traditional verification methods accepted in Europe, leading to a direct increase in both customer conversion and approval rates.
Fraud prevention. Offers a high level of onboarding and operational security via SCA implemented by banking institutions and data cross-matching features.
Seamless integration. Delivers an effortless product implementation experience for Sumsub clients via our lightweight Mobile and Web SDK frameworks.

How Penny Drop Verification works

Sumsub utilizes the open banking infrastructure, which, in accordance with the revised PSD2, mandates Account Servicing Payment Service Providers (ASPSPs) in the European Economic Area (EEA) to allow authorized Third Party Providers (TPPs) access to financial customer data via application programming interfaces (APIs) on the basis of explicit customer consent.

We conduct all the payment transactions via our virtual account on Volt’s platform, which requires our clients to simultaneously use the Penny Drop Refund feature, as per the PSD2 regulatory requirements that restrict Sumsub from storing funds for any longer than is necessary to conduct the customer due diligence (CDD) process.

Step-by-step product journey

Country and bank account selection. The user identifies their onboarding country and bank, from which the transfer will be conducted.
Consent review. The user provides consent for personal data sharing and authorizes the transaction.
Bank account login. User logs into their online banking account via Secure Customer Authentication (SCA).
Payment confirmation. The user authorizes a nominal payment, typically of 0.01 EUR, to be processed from their account. The transferred amount will be returned.
Real-time presence and account ownership validation. The relevant user identity and account data are retrieved to confirm the user's real-time presence. Additionally, the system cross-checks the information to ensure a complete identity match and validate the account ownership.

Supported jurisdictions

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

Austria

Belgium

Bulgaria

Croatia

Cyprus

Czechia

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Norway

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:

The Photo Identity Verification/Auto Identification method complies with the national AML/CTF regulatory requirements for customer due diligence in Europe (see the breakdown by country below).
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.
The Instant Payments Regulation (Regulation (EU) 2024/886) mandates two key requirements:
- Instant payment processing. All payment service providers (PSPs) in the Single Euro Payments Area (SEPA) are to offer instant payment transactions as a standard service, ensuring they are as accessible as traditional SEPA 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.
- Verification of Payee (VoP). All PSPs are to verify personal payer details against the payee’s bank account records, preventing misdirected payments and enhancing the accuracy of credit transfers within the SEPA zone. It establishes liabilities for mismatches that are not promptly resolved, mandating PSPs to issue refunds, thereby strengthening anti-fraud measures at both regional and international level.

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.

What is the difference between SEPA and SEPA Instant payment transfer methods?

The Single Euro Payments Area (SEPA) is a pan-European payment system that enables international bank transfers in the Euro currency across 36 participating countries, including all 27 member states of the EU and Andorra, Iceland, Lichtenstein, Monaco, Montenegro, Norway, San Marino, Switzerland, United Kingdom and the Vatican City. SEPA Credit Transfers typically take 1–2 business days to settle. SEPA Instant, on the other hand, facilitates real-time payments, settling transactions in a matter of seconds, even on weekends and holidays. Currently, each financial institution decides internally on the payment system they adopt, therefore, to avoid delays in customer verification and session drop-offs, Sumsub's Penny Drop Verification solution covers only those banks that process at least 80% of all payment transactions within 30 minutes.

To whose bank account will the payment transaction ultimately be sent?

There are two options:

If the business opts to use Sumsub's virtual settlement account, the payment will be received by Sumsub and automatically refunded to the end-user.
If the business chooses to use their own settlement account, the payment will be sent directly to the client’s account. This option requires passing an additional due diligence process and executing a supplementary Service Agreement with Sumsub's partnering Payment Initiation Service Provider (PISP) Volt, Sumsub acting as the supporting intermediary. The process takes around 2-3 weeks to complete.

Which currencies does Penny Drop Verification support for payment transactions?

Currently, Penny Drop Verification only supports transactions made in the Euro (€) currency.

What is the possible range of payment amounts that the end-user may be charged?

Both SEPA and SEPA Instant international transfers generally cost the same as local domestic bank transfers, which are often free of charge. However, some financial institutions may charge additional fees, depending on their internal policy. Since Penny Drop Verification only supports Euro-to-Euro transactions, there will be no currency conversion fees involved.

Are Sumsub clients required to perform any additional actions to enable the Penny Drop Refund feature?

No, this feature will be enabled for all clients using the Penny Drop Verification solution and relying on Sumsub's Virtual Account with Volt.

Will the end-user be charged an additional transfer fee for the payment transaction?

No, the end-user will not be charged an additional fee for refund transactions.

What is the possible range of payment amounts that the end-user may be charged?

Both SEPA Credit Transfers and SEPA Instant international transfers generally cost the same as local domestic bank transfers, and are often free of charge. However, some financial institutions may charge additional fees, depending on their internal policy. Since Penny Drop Verification only supports Euro-to-Euro transactions, there will be no currency conversion fees involved.

What is the maximum time for payment transaction processing?

The exact processing time depends on the payment system used by the financial institution. Within the SEPA Instant infrastructure, settlements occur within seconds. However, for standard SEPA Credit Transfers or other non-instant methods, processing can take up to 72 hours. To avoid delays in customer verification and session drop-offs, Sumsub's Penny Drop Verification solution covers only those banks that process at least 80% of all payment transactions within 30 minutes. Nonetheless, our system allows for a maximum of 24 hours for the transaction to be either successfully approved by the payees ASPSP and received by Sumsub, or rejected due to one of the applicable reasons.

What is the maximum time for refund transaction processing?

While Sumsub's solution processes refunds instantly, the settlement time on the beneficiary’s side may vary, depending on the bank’s system. Within the SEPA Instant infrastructure, refunds are completed the same day. In terms of SEPA Credit Transfers, the process may take up to 48–72 hours, however, to avoid delays in customer verification and session drop-offs, Sumsub's Penny Drop Verification solution covers only those banks that process at least 80% of all payment transactions within 30 minutes. If the transaction is not received or confirmed within 30 minutes, the user may be asked to restart the process or select a different bank to proceed with the verification process.

What are the possible reasons why a refund transaction could be rejected?

There are no known scenarios in which the refund transaction could be left unprocessed. Sumsub will ensure that the user's payment is either automatically or manually returned to them.

What are the possible reasons why a payment transaction could be rejected?

A payment transaction may be rejected due to:

User not completing the SCA on the ASPSP's platform.
User denying the the payment transaction authorization.
Payment transaction being refused by the payee's ASPSP.
User having insufficient funds in their bank account.
Transaction processing exceeding the 24-hour threshold.

Does Sumsub charge its clients per initiated or completed Penny Drop Verification session?

Sumsub's clients are charged for each initiated Penny Drop Verification session.

How can Sumsub's clients request an addition to the list of covered financial institutions?

Clients can submit a request to Sumsub via their dedicated Customer Success Manager to check if the desired ASPSP is available within the EU/EEA or other open banking ecosystems and supports SEPA Credit Transfers or SEPA Instant. If the bank is not already supported, Sumsub will assess processing times and the payment methods available to determine whether the ASPSP can be added.