Getting to grips with IBANs

IBANs are an integral part of how payments are made globally. IBAN stands for International Bank Account Number; they are unique identification numbers that enable banks to determine an account and its country of origin.
Copy to Clipboard
IBANs

IBANs are an integral part of how payments are made globally. IBAN stands for International Bank Account Number; vIBAN stands for virtual IBAN, they are unique identification numbers that enable banks to determine an account and its country of origin.

This, in turn, ensures a payment gets transferred correctly to the right person or business.

What are virtual IBANs?

While regular IBANs are matched on a one-to-one basis with bank accounts, virtual IBANs (vIBANs) can process multiple payments into and out of a central bank account with a virtual account number. It’s perhaps simpler to consider virtual IBANs as a sub-account of a master account. 

If you receive payments from many accounts with a single IBAN, you’ll normally require the sender to issue more reference information in order for you to identify them alongside your other payments.

If the payee forgets to include any reference information or makes a typo it can take time and, as a result, additional cost to identify where the money came from. 

However, if you assign each payee with a unique virtual IBAN account, the payee isn’t required to enter any additional information as it is clear where monies are coming from. The creation of these virtual IBANs is instantaneous, making virtual IBAN a more efficient method for businesses to monitor expected mass payments with a virutal IBAN.

Learn how to navigate the challenges of cross-border payments.

Why Virtual IBANs matter?

Sending and receiving international payments can be extremely costly. With virtual IBANs, businesses can accept payments in the currency of the payer and receive them into a local-currency bank account – cutting out FX charges that come from converting every single international payment.

virtual ibans
virtual account reference number
incoming payments

As a part of our Mass Payments solution, we offer our BaaS clients virtual IBAN solutions with the Master Account and virtual IBAN accounts offered in: EUR, GBP, CHF, USD and PLN.

The main functionalities we offer:

  • Master account (safeguarding/settlement account):
    • Main account for batch booking of all funds processed from/to the vIBANs
  • Virtual IBANs:
    • Visible to end customer and always linked to master account
    • Identify incoming and outgoing payments
  • Payments:
    • All SEPA schemes (SCT, SCT Inst & SDD)
    • Internal payments 
    • Local payments for PL & SE
    • Cross-border international

Cross-border payments and FX are common pain points for businesses that operate internationally, so having access to vIBANs can make a big difference to how you operate.

In the realm of banking, a physical bank account has long been the cornerstone of financial transactions. With a physical bank account, individuals can deposit and withdraw money, access personalized customer service, and receive physical checks and account statements. These traditional physical bank accounts have been the norm for generations, providing a tangible connection to one’s financial resources. However, in the era of digital innovation, a virtual IBAN accounts (virtual accounts) has emerged as a modern alternative from a traditional bank account, revolutionizing the way people manage their finances in an increasingly online world with virtual accounts (virtual IBANs) and physical bank accounts are no longer the cornerstone of financial transactions.

To learn more about virtual IBANs and what Vodeno can provide your business, arrange a call today to discuss your virtual IBAN opportunities for an IBAN account.

Download Our

Latest report: The Future of BaaS

Some more

Relevant articles.

Get in touch to schedule a demo of the Platform in action.

financial services