If you have a bank account, then you’ll have an IBAN or International Bank Account Number. It is based on a standardised international numbering system to identify a bank account anywhere in the world. Consisting of 34 alphanumeric characters, IBANs have been around for over 20 years and are clearly an essential tool when it comes to sending and receiving money between accounts separated by international borders, but they aren’t ideal for the needs of companies that do a lot of business online.
Which is why an alternative type of IBAN has now emerged – the ‘virtual IBAN’. Instead of directing a transaction to a physical bank, the virtual IBAN directs the transaction to an online bank account. While the virtual IBAN acts in exactly the same way as the IBAN with your main bank, it has a number of distinct advantages for businesses. Here’s why:
Virtual IBANS are better for business
Setting up a business account is easier
Virtual IBANs avoid much of the bureaucracy involved with setting up an account at a traditional banking establishment. As many entrepreneurs know, setting up a business account can be a convoluted and lengthy process with traditional banks. That’s not the case with a virtual IBAN from an online platform. For instance, with a virtual IBAN, there is no requirement to reside in the same country of the bank offering the account.
You can do a lot more with a virtual IBAN. For example, instead of payments being directed to one bank account, business owners can direct payments from different countries to separate accounts, in preferred currencies, to make them easier to manage. This makes reporting and accounting simpler because you can create sub-accounts and statements for different product ranges, or even sort it by customer.
The cost-savings can be significant
Some companies have found that using a virtual IBAN can cut banking fees by as much as 20% – especially those that do a lot of business online in different global markets. This is because many traditional banks will charge high FX and transfer fees for converting every individual payment that comes in.
When it comes to security, virtual IBANs are kept in redundant, encrypted servers in the cloud with very low risk of fraud or downtime. It’s also easier for businesses to comply with AML (Anti-Money Laundering) and KYC (Know Your Customer) rules due to end-to-end transparency and segregation of funds.
Virtual IBANs speed up all transactions greatly. Businesses can use KoalaPays network to make and receive most payments instantly. Even EU transfers can be processed the same day.
Put a virtual IBAN to work for your business
Virtual IBAN accounts provide a wide variety of benefits for companies, especially if you do business overseas. Your virtual IBAN allows you to have a multi-currency, multi-jurisdictional banking solution without the need for managing many different banking services.
Contact our team today and find out how an IBAN from KoalaPays can help streamline your business processes.