Are multi-currency vIBANS the banking solution you need?

There’s no denying that virtual bank accounts or virtual IBANS – vIBANS for short – are an interesting feature and are fast becoming a staple in banking.

As we become increasingly financially aware and in control of our finances, more and more businesses are looking for new ways to handle their funds when abroad or doing business internationally. A virtual IBAN or vIBAN for short, is an easy solution to help execute this. Whilst vIBAN products from banks, FI’s, PSP’s or fintechs aren’t relatively new concepts, however, the digital age have brought them mainstream. Should vIBANS be the norm?

What is a vIBAN?

A vIBAN is more than just another tool for reconciliation, it’s a fintech solution for cross-border payments. Having the option for a virtual account can help businesses increase their straight-through reconciliation (STR) rate and centralise collections.

These virtual accounts play a big role in helping businesses of all sizes; sole traders, SMEs and corporates improve their reconciliation and cash & liquidity management – therefore allowing for full cash concentration and visibility.

A virtual IBAN is an IBAN (International Bank Account Number) reference issued by a bank to allow incoming payments to be re-routed to a different, physical bank account. A vIBAN account enables the account owner to hold reserves in multiple currencies, which creates a cash pool to optimise their FX management.

Virtual IBAN (vIBANS) accounts can be used to send and receive payments worldwide, allowing businesses to extend their value chain to provide settlement services to its global customers – which is key when conducting international business and making payments – due to savings on currency exchange costs/fees, and reducing FX exposure and risk.

Freemarket and vIBAN accounts

Freemarket enables businesses to have access to vIBANS in a wide range of currencies. Freemarket can request a vIBAN on the customer’s behalf to a bank for multiple currencies. This will allow the client to provide their own account number, with their own company name instead of Freemarket’s for transactions.

Our multi-currency vIBANS offers you greater flexibility and enables businesses to make smarter decisions and simplify collection and reconciliation processes across a wide range of jurisdictions.

A request for vIBANS should be placed with one of Freemarket’s Account Management team. Following this, we will follow our internal Compliance procedure to create the account and vIBAN for you. It’s that simple and easy.

How do vIBANS work?

Freemarket-vIBANS-flow

From the customer’s point of view, a virtual IBAN works in exactly the same way as a regular IBAN account – once they make a payment, the funds will re-route to an IBAN or physical bank account linked to the virtual IBAN.

The vIBAN account is made of:

Account Owner Name: the client name (to be provided by the client – must be the company registered company name or individual’s legal name)

BIC: A bank identifier code (BIC) is a unique identifier for a specific financial institution. This will be provided by the bank upon vIBAN creation.

In addition, the bank can provide:

Sort code: identifies both the bank (in the first digit or the first two digits) and the branch where the account is held.

Account number: the domestic bank account number

Freemarket works with businesses to accelerate their growth by giving them access to cross-border payments and currency exchange optimised for their needs. Freemarket’s platform gives you access to a global bank network and innovative technology in one place, allowing you to streamline your processes, remove complexity and increase efficiency. See how we can help your business grow globally.