Let's tell a short story - Ahmed is the CEO of a manufacturing company which has been highly successful with clients within his home country. Over the last few years, his clientele and partners have grown beyond his country's borders, reaching Europe, the United States, and other regions, enabling him to operate internationally. He now needs to process several high-value transactions to vendors and clients in countries like China, Denmark, USA, etc.

Here comes the problem - his bank accounts are local, forcing him to use multiple third parties to pay his partners in international currencies or collect payments from his clients. Setting up foreign accounts has been a hassle, particularly because his base is in Africa. This is a common problem for businesses on the verge of expansion- sourcing international banking partners or solutions. This is where Virtual IBAN Accounts (vIBAN) come in, allowing businesses to operate multiple virtual accounts in foreign countries.

In this article, we will explore what a virtual IBAN account is and why your global business needs one.

What is a Virtual IBAN?

A virtual IBAN (International Bank Account Number) is a bank account number issued to businesses or individuals to enable them to receive or send money internationally. Unlike a regular IBAN, which is tied to a single financial institution, a Virtual IBAN enables businesses to collect payments in different currencies, making it bank agnostic and fit for multi-purposes. With a vIBAN, businesses can easily process high value and volume of multi-currency payments, route them, and reconcile payments.

Virtual IBAN is a long combination of letters and numbers that represent the country code, which specifies the country to which the bank account is linked, the check digit code, the bank identifier code, the sort code, and the account number. These codes are essential as they make tracing transactions easier and ensure security.

How does Virtual IBAN work?

Virtual IBANs are efficient and convenient for cross-border payments. With a vIBAN provider like WeWire, businesses can rest assured of the security of their business information, funds and transactions due to the robust security measures and KYC levels in place.

A business owner can generate multiple authorised vIBANs to manage cross-border transactions in various global currencies. Once a merchant creates a Virtual IBAN with a provider such as WeWire, the account can be incorporated into their payment system for customers. The virtual IBAN system allows merchants to collect payments in different currencies including Euro, Dollar, Pounds, etc.

When a payment is initiated, WeWire identifies the associated virtual IBAN and routes the funds to the corresponding primary account. The multi-currency feature converts the currency if necessary, ensuring you receive the funds in your preferred currency.

Why your business needs a virtual IBAN

The benefits of this virtual payment system, which uses encryption to ensure security and traceability, are significant, especially for businesses that process cross-border transactions and high-volume payments.

With WeWire, businesses can get vIBAN for their transactions, track payments and simplify their reconciliation process.

Here are some important benefits of virtual IBAN for global businesses

• Cost Saving—By streamlining payments with vIBAN, businesses save on the high costs associated with traditional international transfers and currency conversion fees. Virtual IBAN payments are typically processed in the recipient's local currency, minimising or eliminating these fees. When conversion is necessary, WeWire offers competitive rates to ensure businesses get the best value for their payments. Merchants also eliminate the cost of fees paid to intermediaries and multiple third-party partners.
• Multi-Currency Functionality—Virtual IBAN empowers businesses to make payment operations without a physical bank account in the location. Through WeWire's local payment partners, business owners who sign up for vIBAN can receive money in various local and international currencies without needing to maintain traditional bank accounts in the said countries.
• Efficient Fund Management—Virtual IBANs allow businesses to compartmentalise their finances, making it easier to track funds, streamline accounting, and adhere to financial regulations. You can assign a specific vIBAN to a particular client, project, or even a department within the organisation.
• Security—Virtual IBANs can help detect and reduce fraud by providing an additional security barrier. The infrastructure they are built on allows you to remotely restrict access, making them less vulnerable to fraudulent activities. If fraud is suspected, virtual IBANs can be quickly disabled, reducing exposure and the risk of financial damage.
• Faster Transaction Time—Apart from being expensive, traditional cross-border payments can be time-consuming as well. Virtual IBANs streamline the process by providing a digital equivalent of a regular IBAN, enabling online transactions and reducing paperwork.

Conclusion

In today’s competitive business landscape, businesses like Ahmed’s need to overcome the challenge of managing cross-border payments efficiently and scale globally with minimal hurdles. Virtual IBANs provide a powerful solution, offering cost savings, multi-currency flexibility, and enhanced security. By simplifying the payment process, they empower businesses to scale internationally without the headaches associated with traditional banking systems.

Is your business ready to take the next step in global expansion?

Sign up for WeWire’s Virtual IBAN today and start enjoying the benefits of fast, secure, and efficient cross-border transactions.