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How Virtual Bank Accounts Can Power Innovative Fintech Apps and Experiences

A team sets up a virtual bank account.
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  • How Virtual Bank Accounts Can Power Innovative Fintech Apps and Experiences

Why virtual bank accounts are the key to seamless cross-border trade.

Digital transformation has never been more crucial to banks and fintech organizations looking to thrive and grow in the current climate, and virtual bank accounts are a great way to embrace digitalization. Offering your customers, employees or contractors the ability to create and use virtual accounts is a powerful feature.

While they fulfill much of the functionality of a regular bank account by allowing the account holder to receive, withdraw and distribute funds, they are faster and easier to create. Because you control the bank accounts, you can add on other features like rewards programs and card issuing to further grow adoption and loyalty.

Popular Use Cases for Virtual Accounts

  • Gig economy platforms can use virtual accounts to instantly pay drivers and workers
  • Sellers on marketplace platforms can receive international payments quickly and easily
  • Businesses can use virtual accounts to pay overseas workers or contractors and reduce foreign transaction fees
  • Provide a turnkey solution for paying unbanked workers while also empowering those workers to participate in the digital economy

How Virtual Accounts Work: Accept International Payments with vIBANs

A virtual IBAN (International Bank Account Number) account, also known as vIBAN, lets you accept payments from multiple countries with minimum fuss. By assigning an IBAN to a digital wallet account, you can receive international payments without the time, hassle and expense of opening actual bank accounts in the countries where you are transacting.

Pros and Cons of Virtual Accounts

Pros of Issuing Virtual Bank Accounts

  • Virtual accounts give you the ability to transfer money to employees, contractors and other stakeholders in near-real time
  • You can provide virtual accounts to workers and contractors that may otherwise be unbanked
  • Issuing your own virtual accounts can significantly reduce transaction fees, especially when transferring funds cross-border
  • Integrating virtual accounts into your apps or product offerings builds loyalty and helps to create an ecosystem of products and services that can transform a traditional app into a super app
  • You can layer on additional services like card issuing and rewards programs to further drive loyalty and adoption

Cons of Issuing Virtual Accounts

  • There are significant compliance and regulatory considerations, such as ID Verification, know your business (KYB) and know your customer (KYC) requirements, businesses looking to add virtual account issuing should consider a partner that can manage compliance and regulations.
  • You need to think about ways customers can make deposits, withdraw funds or make payments. Virtual card issuing is a complimentary service that enhances the customer experience for your virtual account holders.

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