Over 20 years have passed since IBANs were first used. Using 34 alphanumeric characters, virtual IBANs help banking systems send money to the correct country, bank, and branch of a physical bank.
The traditional IBAN, however, is not ideally suited to the needs of online merchants as they were created before eCommerce became mainstream. Meanwhile, alternatives to traditional banking services can be very helpful for online merchants who need to receive money from their acquirers and send funds to partners and suppliers around the globe.
What Is A Virtual IBAN?
A new alternative to the traditional IBAN has emerged as more and more business is conducted online. Virtual IBANs are numbers that do not correspond to physical accounts. Instead, incoming payments can be routed to a physical bank account with a unique IBAN. Virtual IBANs have the same features, as well as several other advantages.
Benefits Of A Virtual IBAN Account
- A Versatile Option: In recent years, online banking has gained significant popularity. It includes virtual IBANs, which are convenient for online merchants in terms of setup speed, ongoing management, and functionality.
- Online convenience: A virtual IBAN account is not linked to a physical branch, allowing it to bypass several traditional banking procedures. To apply for a virtual IBAN, you do not have to be physically based in the country of the bank offering it. It can therefore be accomplished online very quickly.
- Added flexibility: Virtual IBAN accounts simplify set-up and implementation and provide merchants with more flexibility when it comes to managing their accounts. A traditional IBAN refers to a single account into which funds will be deposited.
Finding Your Ideal Virtual IBAN Provider
While many organizations licensed to act as financial institutions can provide IBANs, they may not offer the same level of security as traditional banks. Virtual IBAN accounts offer a variety of benefits to FX and payments companies as well as their customers.
With these accounts, FX and payments companies can maintain a master IBAN account for which they can create virtual IBAN accounts for their customers, which simplifies settlement and reconciliation. Certain virtual IBAN providers keep funds in segregated bank accounts, which is more secure than dealing with a standard bank account.
To Conclude
Merchants today may receive payments from a variety of countries and acquirers, across various products and services. B2B payments are made more convenient and efficient by using virtual IBANs. When funds are routed to different accounts, merchants can better track business performance and remain compliant.
With OpenPayd, you can transform how your customers send and receive money, from wherever they are in the world. With a unique IBAN assigned to every user, you can track every penny and cent, rationalising your reconciliation. You can create a limitless number of accounts in multiple currencies, with all functionality delivered through one smart API.