Streamline international payments with virtual IBANs

Managing international payments can be complicated. Traditional banks often require businesses to open separate accounts in each country, leading to higher fees, slower transactions, and more admin work.

A virtual IBAN is a simpler, more efficient way to send, receive, and manage international payments – without the need for multiple bank accounts.

This guide will explain how virtual IBANs work, their advantages, and how to get one.

What is a virtual IBAN?

A virtual IBAN (International Bank Account Number) is a unique payment reference number that allows businesses to send and receive local and international payments, just like a standard IBAN. However, instead of being tied to a separate physical bank account, multiple virtual IBANs can sit under one master account, making it easier to route and track payments.

You can issue multiple virtual IBANs in different currencies or regions without needing to open separate bank accounts. Customers can send payments using local banking details, and your business receives all funds in one consolidated account.

Here’s how that could work. Imagine a UK-based eCommerce business selling to customers in Europe and the US.

Without a virtual IBAN, the business would need separate bank accounts in the UK, Europe, and the US to accept local payments. Customers might have to pay foreign transaction fees, making purchases less convenient.

With a virtual IBAN, the business can issue a EUR virtual IBAN for European customers and a USD virtual IBAN for US customers. Customers pay using local banking details, but all funds are routed to the business’s main account, without needing separate bank accounts.

How do virtual IBANs work?

A virtual IBAN works like a standard IBAN for receiving payments, but instead of being tied to a separate bank account, it redirects all incoming funds to a central business account.

1. The business creates a virtual IBAN and shares it with customers or partners.

2. The customer makes a payment using the virtual IBAN, just as they would with a traditional IBAN.

3. The payment is automatically routed to the business’s primary account without the sender noticing any difference.

The key differences from a traditional IBAN are:

Account issuance – A payment provider assigns a virtual IBAN and links it to a main account, rather than being a standalone bank account.

Payment routing – Incoming payments are automatically redirected to the master account, simplifying account management.

Currency flexibility – Businesses can hold, convert, and send multiple currencies from one place, avoiding the need for local bank accounts in different countries.

What are the benefits of using a virtual IBAN?

A virtual IBAN helps businesses manage international payments more efficiently by reducing costs, simplifying operations, and improving customer experience. Here’s how:

Faster international transactions

Traditional cross-border payments can take several days, especially when multiple banks are involved. With a virtual IBAN, businesses can process payments faster by using local banking networks such as SEPA in Europe or Faster Payments in the UK. 

This means:

• Quicker settlement times, often in hours instead of days.

• Fewer delays and banking intermediaries, reducing processing time.

• Improved cash flow, as payments arrive faster.

Easier payment tracking

Managing multiple international transactions can become complex when payments are spread across different accounts. A virtual IBAN simplifies this by enabling you to:

• Assign unique IBANs to customers, departments, or regions for easy tracking.

• Automatically route all payments to a single master account, reducing manual reconciliation.

• Gain better financial oversight with real-time transaction tracking.

Multi-currency support for global payments

For businesses operating across borders, currency conversion fees can add up quickly. A virtual IBAN allows you to:

• Hold, receive, and send payments in multiple currencies from a single account.

• Avoid automatic currency conversions, reducing unnecessary exchange fees.

• Settle payments locally, making it easier to work with international customers and suppliers.

Lower banking fees

International banking often comes with hidden costs, including:

• SWIFT charges for cross-border transfers.

• High foreign exchange markups when converting currencies.

• Account maintenance fees for multiple accounts in different countries.

A virtual IBAN removes these costs by allowing you to accept payments in multiple currencies without needing separate local accounts. This leads to cheaper, more transparent banking.

Improved customer experience

Customers like making payments using local bank details. A virtual IBAN helps you to:

• Provide local banking details, even if you don’t have a physical presence in that country.

• Reduce friction in transactions, so it’s easier for customers to pay.

• Build trust, as clients see familiar banking details instead of a foreign account.

How to get a virtual IBAN

You can compare the top virtual IBAN providers here. 

Setting up a virtual IBAN with Airwallex is straightforward and can be done entirely online.  

1. Sign up for an Airwallex account here

Provide your business details and complete the KYC (Know Your Customer) verification process.

2. Open a business account

Once approved, you’ll gain access to an Airwallex multi-currency account, allowing you to send, receive, and hold funds in multiple currencies.

This account acts as the primary account for all virtual IBAN transactions.

3. Create virtual IBANs

Generate unique virtual IBANs as you need them.

You can assign IBANs to different customers, regions, or business units for easier reconciliation and tracking.

4. Start receiving payments

Share your virtual IBAN details with customers, suppliers, or partners.

Payments made to the virtual IBAN will be automatically routed to your main Airwallex account.

Funds can be held in multiple currencies, converted, or transferred as you need.

Who are virtual IBANs useful for?

A virtual IBAN makes it easier to send, receive, and manage international payments without the hassle of opening multiple bank accounts. 

Here’s how different businesses and people could use them:

1. Companies handling international payments

Businesses working across borders can:

• Cut down on transaction fees compared to traditional bank transfers.

• Get paid faster using local banking networks.

• Keep track of payments more easily by managing everything from one account.

2. eCommerce stores and online marketplaces

Selling to customers in different countries? A virtual IBAN helps you:

• Offer local payment options, making it easier for customers to pay.

• Receive payments in multiple currencies without forced conversions.

• Reduce chargebacks by using trusted local banking details.

3. Freelancers and remote workers

Working with international clients? A virtual IBAN lets you:

• Get paid in different currencies without needing multiple bank accounts.

• Avoid expensive banking fees, keeping more of your earnings.

• Withdraw funds locally or convert them when it suits you.

4. Financial services and fintech platforms

Virtual IBANs help fintechs and payment providers:

• Set up local account details for customers without opening full bank accounts.

• Process large volumes of international payments quickly.

• Automate payments and transfers with API integrations.

Virtual IBANs vs traditional IBANs: Which is right for you?

If you need to manage payments in multiple currencies without opening separate accounts in each country, a virtual IBAN is the smarter choice. It lets you send, receive, and hold funds globally while keeping everything in one central account.

A traditional IBAN, on the other hand, is best for companies needing a dedicated local bank account in specific countries, often with stricter banking requirements and higher costs.

International transactions don't have to be slow, expensive, or complicated

A virtual IBAN is a smarter, more efficient way to receive and manage global payments. Instead of juggling multiple bank accounts, you can issue local IBANs in different currencies while keeping all funds in one central account.

With Airwallex, getting a virtual IBAN is fast, fully online, and hassle-free. Sign up to start making global payments easier, cheaper, and more efficient.

Frequently asked questions about virtual IBANs

Are virtual IBANs safe?

Yes. Virtual IBANs follow strict banking security measures just like traditional IBANs. They comply with:

• AML (Anti-Money Laundering) regulations, preventing fraudulent transactions.

• KYC (Know Your Customer) requirements, ensuring identity verification.

• Strong encryption and fraud protection, safeguarding transactions from unauthorised access.

When using a regulated provider like Airwallex, your funds are held securely with trusted financial institutions. You can learn more about this in the Trust Center.

Do I need a bank account to use a virtual IBAN?

Not necessarily. A virtual IBAN is not a standalone bank account, but it does require a linked business account to function. This doesn’t have to be a traditional bank account. It can be a multi-currency account from a provider like Airwallex.

How long does it take to get a virtual IBAN?

Some banks take days or weeks to issue a traditional IBAN, but virtual IBANs can be set up rapidly. With Airwallex, you can get a virtual IBAN within minutes once your account is verified.  

Can I have multiple virtual IBANs?

Yes. Businesses often create multiple virtual IBANs for different customers, currencies, or markets to simplify reconciliation and payment processing.

Disclaimer: We wrote this article in Q1 2025. The information was based on our own online research and we were not able to manually test each tool or provider. The information is provided for educational purposes only. Consider the specific requirements of your business when evaluating providers. If you would like to request an update, feel free to contact us at [email protected].