Banking services have evolved over the years. Today, technology and IT systems have offered companies more banking choices than before, enabling them to perform transactions quickly. Online merchants can also receive money from acquirers and send it to their partners and suppliers throughout the world with a tap of a button.
The banking service that has made this possible is known as IBAN (International Bank Account Numbers). These accounts enable banks to send money to specific banks in specific countries. They have an array of information and data that enables the money to move accurately and quickly.
Virtual IBAN Definition
A virtual IBAN is an account number that’s not in a physical bank. Despite that, it enables merchants to reroute incoming payments to a different account in a physical bank. Virtual IBANs provide most services that traditional banks give.
A virtual IBAN has 34 alphanumeric characters. It has been in existence for more than 20 years and is a vital tool for sending and receiving money to international accounts. It’s also ideal for companies doing business online.
Virtual IBANs have offered a solution to companies having a large volume of international payments. They’ve allowed them to simplify transaction processes and exercise more control without setting up and managing an account in a physical bank.
Most companies that process transactions in various currencies have challenges reconciling their incoming payments. But with virtual IBANs, they can set up an account to receive payments from every client before rerouting it to a master bank account.
How Could Virtual IBAN Help Your Business
It Has Made Setting Up A Business Account Easier
Setting up a business account in a physical bank is lengthy. There’s a lot of bureaucracy involved in setting such an account. But with IBAN, this process is made simpler. In fact, you don’t have to live in the country you’re setting up the bank account to open a business account.
It Offers Enhanced Security
Security is the number one issue for physical banks. Every company would wish to have their money stored in a secure facility. Virtual IBANS can give you that security because they’re kept in encrypted servers with a very low risk of downtime or fraud. This makes it easier for organizations to also comply with Know Your Customer and Anti-Money Laundering rules.
Some organizations have discovered using IBAN accounts can reduce banking fees by 20%, especially if you have many international transactions. That’s because IBANs don’t charge high transfer and FX fees for converting payments that come into their accounts.
It’s More Functional
Organizations can do a lot with a virtual IBAN. For example, organizations can send direct payments from separate accounts to make management easier. Moreover, these IBANs have increased the speed of transactions. Through them, you can instantly make and receive payments. In fact, you can even process EU transfers within the same day.
Virtual IBANS have various benefits for organizations that transact international business. Through them, an organization can have a multi-jurisdictional and multi-currency banking solution that doesn’t require managing different banking services. The result is faster transactions that traditional banks may not offer.