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Why Virtual Bank Accounts are the Key to Seamless Cross-border Trade


In this economic climate, digital transformation is more crucial than ever for banks and fintech companies looking to succeed. Embracing digitalization is easier with virtual bank accounts. Offering your clients, employees, and contractors virtual accounts is therefore incredibly beneficial.

How Virtual IBANs work with International Payments

Rather than directing transactions to a physical bank account, virtual IBANs route transactions online. Businesses can use virtual IBANs to extend their range of services to global customers just as they can with their traditional counterparts. In terms of functionality, a virtual IBAN account functions exactly like a regular IBAN account. It can send and receive payments and transfer funds between the virtual account and the linked physical account.

By allowing the account holder to receive, withdraw, and transfer funds, they fulfil much of the functionality of a regular bank account, but they are faster and easier to create. With control over the bank accounts, you can also add loyalty and rewards programs to further grow adoption.

Popular Use Cases for Virtual Accounts

  • Platforms that are part of the gig economy can instantly pay their workers and drivers via virtual accounts.
  • Marketplace platforms make it easy for sellers to receive international payments.
  • The use of virtual accounts can reduce the cost of paying foreign workers or contractors.
  • Offering turnkey solutions that allow unbanked workers to be paid and empowered to participate in the digital economy.

 Advantages of Issuing Virtual Bank Accounts

  • Your company can transfer money quickly and securely to employees, contractors, and other stakeholders through virtual bank accounts.
  • Providing virtual accounts to contractors and workers who are otherwise unbanked will allow them to receive payments.
  • Having your own virtual account can reduce transaction fees significantly, especially when transferring funds cross-border.
  • Including virtual accounts in your apps or product offerings helps to build loyalty and create a broader ecosystem of products and services that can transform a traditional application into an application preferably more enhanced.

Disadvantages of Issuing Virtual Accounts

  • The compliance and regulatory considerations that must be addressed, including ID Verification, Know-Your-Business (KYB) and Know-Your-Customer (KYC), require businesses to secure a partner that can manage compliance and regulations.
  • Customers should be able to deposit funds, withdraw funds, or pay with their debit or credit cards. Virtual cards are a complimentary service that will enhance the customer experience for your virtual account holders

To Conclude

In today’s distributed workforce, different levels of access can be provided to different team members to manage and operate account activities. Segmenting workflows can increase operational efficiencies for digital companies.

In addition to improving compliance functions, virtual IBANs ensure that parties are verified, and payments are screened for any red flags. This ensures that your customer (KYC) functions are also improved. The virtual IBAN functions as an improved version of the traditional IBAN.

Security is a top priority. The future is virtual IBANs, where most companies, not just e-Commerce firms, will start accepting them. Over time, traditional banking will be upgraded.

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