Virtual IBAN: A benefit to High-Risk Merchants

Businesses have been looking for making cross-border transactions as seamless as possible for both themselves and their clients for years. The traditional banking system has a laborious and time-consuming onboarding process and thus, high-risk merchants face most problems regarding international payments.

If you are looking for ways to hassle-free overseas payments, virtual IBAN can play a significant role in solving your problems. With virtual IBAN accounts, you are relieved from opening and maintaining several bank accounts to carry out international transactions. 

What is a Virtual IBAN Account?

A virtual IBAN (International Bank Account Number) is a virtual account reference number allocated by the bank to allow incoming payments to be routed to a different physical bank account.

Virtual IBAN account enables businesses to extend their value chain to provide global customers with effective settlement services. It can be used to receive and remit payments worldwide. 

Benefits of Virtual IBAN

With businesses expanding their horizons to a global level, the need to manage cross-border transactions has increased drastically. A virtual IBAN account can help businesses in this matter in many ways. Let’s understand the benefits it offers.

  • Easy Account Set-up Process

A virtual IBAN eliminates several formalities. In the traditional banking system, applying for a bank account is usually a lengthy process and it requires you to meet numerous conditions. This is not the case with virtual IBAN accounts.  

For example, the physical presence of an account holder is not a requirement for opening a virtual IBAN account. Thus, the onboarding process becomes fast and easy. Operating multiple accounts for multiple currencies is also possible in a trouble-free manner.

  • Significant Cost Reduction

With a virtual IBAN account, a merchant account holder can save almost 20% of his transaction cost. A major reason for this change is that, in the conventional banking system, a major part of the revenue was attributed to the transaction cost. 

Traditionally, many banks used to charge high foreign transaction fees and transfer fees for individual payments. Virtual IBAN providers follow different pricing policies. This function is most helpful for businesses having several global markets.

  • High Functionality

Virtual IBAN offers increased functionality and a seamless operating system. Virtual IBAN providers offer payment solutions for multi-currency and multi-jurisdictional transactions. No banking relationship is mandatory in each country where you possess a virtual IBAN account. 

By using a master virtual IBAN account, business organisations can redirect payments into separate IBAN accounts in local currency. Having such separate accounts based on geographical location, product category, and even customers make payment management, settlement, and reconciliation much easier and more speedy.    

  • Enhanced Security

In a virtual IBAN account, data is stored on the cloud in encrypted and redundant servers. Though it ensures highly secured service, a little risk of fraud or downtime is always there. 

Using end-to-end transparency and funds segregation, complying with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations becomes much more streamlined. Some virtual IBAN providers even furnish compliance-as-a-service to the customers to downscale their burden. 

  • Aid in Scaling Internationally

Virtual IBAN accounts are highly useful for companies who receive foreign payments in large numbers because they need local payment details to carry out their business. For example, adding funds to their wallets using their local fiat currency has to be enabled for crypto exchanges and digital currency businesses. 

Reconciliation is often challenging, and the finance team has to spend a lot of time tracking down and reconciling payments. In virtual IBAN, segregated accounts eliminate such complexities. Businesses looking forward to scaling internationally can benefit to a greater extent from this function. 

  • Faster Transaction

In virtual IBAN, all transactions take place in only one account. Therefore, settlements and directing the payments are much faster than multiple physical accounts. 

Payment processing is also faster while using a virtual IBAN. Many times, these accounts enable transaction processing within a day.

  • Improved Payment Acceptance

Payments are made in the name of your underlying clients only. And, as all transactions in business essentially take place in one physical account, payment acceptance improves.

How can Paypound help you?

Paypound is the leading and fastest-growing merchant account provider for several high-risk businesses. With Paypound, you can open a payment account and get a unique IBAN with your name or company name as a sender or recipient without any hassles.

Paypound applications are an entirely virtual process, and we offer 24/7 support to your business.

Start typing and press Enter to search