What is a virtual IBAN, and how does it benefit my business?

Organisations have been looking for simple and effective ways to make cross-border payments as frictionless as possible for themselves, and their clients, for years.

Traditional business account solutions often involve long, laborious onboarding processes during set up, with ongoing resources needing to be allocated to ensure all banking relationships are maintained appropriately. Virtual IBAN accounts, however, offer an alternative that provides more control, increased efficiency, and a much simpler implementation process.

What is a virtual IBAN account?

A virtual IBAN (also known as a virtual account) is an IBAN (International Bank Account Number) reference issued by a bank to allow incoming payments to be rerouted to a different, physical bank account. Virtual IBAN accounts can be used to send and receive payments worldwide, allowing businesses to extend their value chain to provide settlement services to its global customers. From the customer’s point of view, a virtual IBAN works in exactly the same way as a regular IBAN account – once they make a payment, their funds will end up in the physical bank account linked to the virtual IBAN.

What are the benefits?

Accepting and sending international B2B payments can often result in companies incurring a large number of transactional fees. Virtual IBANs offer companies the same facilities as a traditional settlement account, however, they reduce costs involved in opening and managing a physical account.

Many traditional providers will try to push full packages on new clients, which include a variety of services they do not require, including credit cards, global payment services, and insurance. Due to this, the whole process can become a serious headache for organisations, meaning they have to invest a lot of time and effort into what should be a simple process. A virtual bank account allows access to payment services without the cost and complexity of a full business bank account. Potential administrative costs are further reduced through the use of virtual IBAN accounts as the whole system aims to facilitate the reconciliation process, allowing businesses to carry out business with ease on a global scale.

Virtual IBAN accounts provide a wide variety of benefits for FX and payments businesses and their customers. The use of these accounts allows FX and payments organisations to control a master IBAN account where they can create and allocate a segregated virtual IBAN account to each of their customers, aiding settlement and reconciliation. A virtual IBAN provides payments businesses with a multi-currency, multi-jurisdictional banking solution without the need for several different banking relationships.

Banking Circle clients can offer international business bank accounts to their customers with Banking Circle virtual accounts. For Banks, FX, and Payments businesses who want to be able to easily accept and settle payments worldwide, including same day settlements for SEPA payments, get in touch with a member of the team at Banking Circle to find out more.


Find out more about virtual accounts

Want to learn more?
Talk to us today

A member of our team of specialists will be happy to help

Contact us