Demystifying Fintech: What is a Virtual Bank Account?

Understanding virtual bank accounts, a new era in commerce

In the dynamic landscape of fintech, virtual accounts are revolutionizing the way businesses handle their financial operations. But what exactly are virtual accounts? Simply put, virtual accounts function similarly to regular bank accounts but with added benefits and simplicity for merchants. They empower merchants to instantly create multiple accounts in countries worldwide that act as local bank accounts. Each account comes with its own unique account numbers, such as virtual IBANs, enabling payers to deposit payments, large or small, using local payment methods and currencies.

The beauty of virtual accounts lies in their ability to simplify global business operations. They allow businesses to swiftly open local accounts across multiple countries without the need to start or maintain numerous banking relationships. These accounts can be used for single or multiple transactions, providing flexibility and ease of use.

The Benefits of Virtual Bank Accounts

Virtual bank accounts come with a host of benefits. They can potentially save your business on international bank transfer fees. They may also offer shorter transaction processing times and reduce your administrative workload.

Other benefits of Virtual Accounts include: 

1. Accept payments in local currency: Virtual accounts allow businesses to accept payments in the local currency of their customers, providing a seamless and familiar payment experience.
2. Easily accept large payments: Whether it’s a small transaction or a large payment, virtual accounts can handle it all with ease. They are an ideal payment option for large international transactions.
3. Paid via local banking rails: Payments are made using local banking systems, ensuring fast and secure transactions.
4. Receive funds as your payers expect: Virtual accounts enable businesses to receive funds using bank transfer methods that are local and familiar to payers, which lowers transaction friction and creates trust and loyalty.
5. Simplify bookkeeping: With virtual accounts, bookkeeping becomes a breeze. Accounts can be assigned to different businesses, business units, individuals or transactions, making record-keeping easy. 
6. Easily provide an IBAN or account details via invoice: Virtual accounts come with their own IBANs or account details, which can be easily shared via invoice, making the payment process straightforward for your customers.