Virtual IBAN Role In B2B Payments

What Is A Virtual IBAN? 

If you’ve been ever wondering what is virtual IBAN or how to get it, then please keep reading on.  

A virtual IBAN is a form of bank account issued by a bank or electronic money institution that permits the account owner to receive or send payments. 

The virtual IBAN account will have a rerouting to a real bank account held by the EMI or issuing bank.  

How Does Virtual IBAN Work? 

Virtual IBAN popularity is being driven by increasing market share of online sales versus physical sales. Also the B2B Payments expanse across borders and currencies, which are setting grounds to capture more online sales.  

A virtual IBAN is a reference number given by bank that allows to route payments to a bank account. Getting a virtual IBAN is easy and quick online process for many international companies and it can be used to make cross-border payments, streamline those payments and comply with necessary requirements that span through B2B and eCommerce digital economy.  

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For clients, a virtual IBAN is the same as traditional IBAN account with a bank – once they proceed with a payment, the money will be received in a physical receiving party’s account linked to the virtual IBAN. 

Moreover, the virtual IBANs can be customised or even multiplied for company or group of companies to match certain requirements. Virtual IBAN has the same facilities as traditional account but can be an effective tool to reduce payment fees.  

On top of that, a streamlined back-office processes, certain degree of automation via API, tailored pricing to each client and much more can be achieved by simply banking online. 

For eCommerce businesses, where acquirers are asking for bank accounts able to collect settlements in at least few currencies, can be hard to obtain. Together with receiving B2B payments in multiple currencies, there is a currency exchange or hedging needs, that must be met in order to maintain a healthy business operations. 

How To Get Virtual IBAN? 

A virtual IBAN is to create access to payment services without cost and complexity that of a traditional bank account, where administrative and reconciliation costs are high. 

You can get a digital bank account with virtual IBANs and all named benefits with an industry leading payments specialists IFX Payments.  

IFX Payments are able to offer settlement accounts to merchants, financial institutions, international corporates and even SME’s. IFX has experience in supporting various industries with international payments and foreign exchange solutions. 

You can find more information about full IFX Payments offering here.

Moreover, there are few things to consider before searching and signing up with any virtual IBAN providers out there. Not all of them are equally good and it is important to choose wisely as they are going to handle your money.  

In order to help, we have put together a list of tips for you in our article How To Choose Payment Service Provider | Complete Guide”. 

What Are The Pros And Cons Of Virtual IBAN? 

The standard virtual IBAN is a phantom account of a normal bank account. This way it is able to replicate having multiple accounts in various jurisdictions and currencies while behind is one actual bank account. In addition, the owner of virtual IBANs is the same owner of actual bank account, and payments are routing to the actual bank account. 

Moreover, virtual IBANs make the management of multiple currencies easier. Because each different currency can have its own virtual IBAN. Also the virtual IBANs owner is able to receive different account statements for each virtual IBAN. 

On the other hand, virtual IBANs cannot replace real multi-currency accounts in different jurisdictions. If a customer or supplier wish to transact inside of one country borders, the virtual IBAN with an actual account in different jurisdiction might not be able to assist. 

Conclusion 

All in all, virtual IBAN is a cheap and quick solution for organizations doing business in multiple markets. It is easy to create, maintain and do account with.  

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