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What Is A Virtual IBAN and How Does It Benefit High-Risk Merchants?

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The IBAN, in general, is that unique code that helps identify a particular bank during a cross-border transaction. You must know the IBAN of your beneficiary to ensure that you are receiving the money properly.

If you are doubtful about the IBAN or input the wrong one, it is most likely that the beneficiary bank will restrict the transaction. Moreover, you will be charged a retrieval fee against the failed transaction. In this post, we will give you details about virtual IBAN, which is more important in the era of digitisation. Besides, it is highly beneficial for high-risk businesses in the UK. Let us now dive into more details.

A virtual International Bank Account Number or virtual IBAN is a non-tangible account issued to a person to receive and send money from one country to another hassle-free.

Having an IBAN means that you do not need several bank accounts to carry out international transactions. That’s also the reason why high-risk merchants prefer to use an IBAN to make payments and receive money from other countries. Moreover, not having to maintain too many physical accounts saves so much time and money too.


Virtual IBAN – What is the meaning?

For any high-risk merchant across Europe, having a proper bank account is mandatory, especially if international transactions are taking place. However, it is often very challenging to manage international transactions using only local bank accounts. Moreover, it is very tedious, time-consuming, and costly due to the constantly changing monetary transaction policies and total resources.

IBAN is that unique number that is part of a standardised international banking system capable of identifying overseas bank accounts. The concept of IBAN was first introduced by the ECB or the European Committee for Banking Standards.

The same body developed and also implemented the IBAN concept to make the process of international payments smoother. A proper IBAN can be divided into distinct parts that are all mandatory. The first two digits make for the country code, then there are two numbers, and the rest are 30 alphanumerical characters.

When the concept of IBAN was introduced, it was supposed to be used especially for cross-border transactions within Europe only. Gradually, other countries also started adopting the concept, which is now used extensively worldwide. Licensed under ISO 13616:1997, presently, the Caribbean and Middle-Eastern countries apart from Europe are the ones that use IBAN the most. These are also countries where high-risk businesses such as gambling and casinos are more popular.

Since virtual IBAN is merely a verification process, you will have to stop using an existing account number under no circumstances. Instead, when you require an IBAN, the bank will issue additional details that have nothing to do with your existing bank account. While IBAN is highly beneficial for high-risk merchants, it may not be the best option for organisations carrying out massive amounts of international transactions.

Each IBAN account is usually linked to a single primary account, which means that irrespective of the amount of money exchanged, all of it will automatically route to the primary account. Also, while using IBAN, one of the most difficult situations is when you have to keep track and reconcile various incoming payments made by clients sitting at multiple locations across the world. Now, virtual IBAN comes in at this point because it can sort out the various transaction sources.

An IBAN permits high-risk businesses to specify unique virtual details to receive money from various clients. This can be for specific currencies and product lines that will be redirected to a primary or master account. As a result, it is now possible for a business to carry out important transactions without the requirement of multiple physical accounts, which are highly expensive and tedious. Of course, the concept of IBAN and virtual IBAN is the same, but the latter has several benefits, especially for high-risk businesses.


What is the advantage of using Virtual IBAN for high-risk businesses?

Here is a list of the most common benefits that high-risk businesses have when using virtual IBANs:


Setting up a business account is easier

Setting up a virtual IBAN account is basic and direct. Any entrepreneur comprehends the long and regulatory interaction of setting up a conventional account. For instance, in many nations, you must dwell in a nation to have a minimum financial balance. Such prerequisites are not restricting when managing virtual IBAN.


Improved transaction management

Your business can set up an actual solitary record and acquire numerous virtual IBAN accounts, which course to the one real ledger. Accordingly, the organisation can copy the impacts of having various records, in numerous nations, for various exchanges. You can set up virtual records for every customer making instalments, or for every instalment made in particular money, or for a particular product offering.

The business will want to get independent proclamations for each virtual IBAN, which improves on explanation compromise. Having separate articulations will empower your business to effectively find every instalment, henceforth simple investigation and recognisable proof of exchange designs.


Highly cost-saving

Opening and running various records in various nations are tedious and arduous as well as expensive. Envision the kind of banking expenses a business will pay to run 20 records! It’s anything but a ton of cash.

For Instance, Smiths Autotech of India, a provider for Mercedes Benz, sells 2 million yearly to the vehicle producer, yet the bank charges are just about as high as 8% in FX.

This organisation used to lose 12% of their monthly revenue in bank fees! In any case, since they embraced virtual IBAN, the expense has extraordinarily dropped. Virtual IBAN empowers organisations to make numerous virtual records that serve practically as actual records while staying away from the high FX charges for exchanging over each instalment that comes in when utilising the account.


Faster transaction

Virtual IBAN works with one real record. Consequently, settlement and steering of instalments are a lot quicker than in the actual record.


Better security

Security is a vital angle when managing monetary records. Having numerous records opens the proprietor to more dangers. As the administration gets dreary when running numerous real records, the shots at committing network safety-related errors also increment.

A virtual IBAN, nonetheless, is kept in redundant, encoded cloud servers. In this way, they have a generally safe of misrepresentation or vacation. The start-to-finish straightforwardness and isolation offered by virtual IBAN likewise make it simpler for organisations to follow Anti-Money Laundering (AML) Know Your Customers (KYC) security guidelines.



High-risk businesses that are presently using virtual IBAN have a competitive edge over others. These organisations are now saving a lot of money that would otherwise be required to maintain multiple physical accounts. Moreover, there is added transaction security now. Well, these may look like basic factors but are make or breakpoints in the industry.

How we can help you

Capitalixe is a leading banking and payments consultancy that is based in London and operates globally. With the help of Capitalixe, it is now possible for all businesses to access financial technology, payments and banking. Whether you are a start-up, a crypto, or gambling business or simply looking to enter into a new market, we have got you covered.

We leverage our network that we have with over 80+ financial institutions, EMI’s and banks worldwide.

The ultimate goal of the team here is to help take the pain away from our clients in finding a trustworthy and suitable solution that is happy to onboard their business. We understand these sectors very well and know how difficult and time-consuming it can be to find a good provider.

Feel free to reach out to us for a complimentary consultation, we will be more than happy to help you.



Get in touch with our team of experts.

At Capitalixe, we specialize in helping our clients who are often deemed as “high risk” find the perfect banking and payment solution for their needs. We do this by leveraging our network of over 100+ financial institutions, EMI’s and banks worldwide. Our goal is to help save you time and take the pain of finding trustworthy and suitable solutions away from you.   

Feel free to reach out to us for a complimentary consultation. We will be more than happy to help you. 

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