E-commerce and online marketplaces are very much here to stay and they’re growing, fast. However, their success often depends on having an effective payments infrastructure. 

Taking your business global isn’t as straightforward as setting up an e-commerce site and waiting for orders to come in. To accept payments, you must be compliant with regional regulations and traditionally, have working relationships with local banks. Expansion means striking up these relationships from region to region as you go and working with various financial institutions and payment systems—each of which will have their own way of doing things. There isn’t much doubt this has led to many finance-related headaches as businesses end up with multiple systems, processes, and interfaces to manage payments across borders, regions, and currencies.

Enter virtual IBANs: they’re paving the way for organizations to bypass the inherent frictions within traditional banking infrastructure to provide simpler and more efficient payments processes in the business-to-business (B2B) world

Virtual IBANs: what are they and how can they help?

Businesses need to provide their customers with trusted payment options while balancing compliance and regulatory requirements. This is where adding virtual IBANs to your financial toolbox streamlines and simplifies the process. A virtual international banking account number (virtual IBAN) is a reference number issued by a bank that allows payments to be routed to a (non-virtual) IBAN/bank account.

Virtual IBANs are plugging many of the inefficiencies between traditional banks and online payments by modernizing transaction processes. By doing so, they’re helping merchants unpick the complexities of traditional global banking relationships and overhaul their payments systems.

Virtual IBANs: the advantages

Seamless global transactions. Virtual IBANs are enabling organizations to set up multiple banking relationships and effectively remove multiple regional systems and replace them with a single payments process. Using virtual IBANs for B2B payments makes the flow of transactions more seamless and intuitive as well. This ease-of-use makes them vastly more user friendly than other options currently available and makes them resemble peer-to-peer (P2P) and customer-to-business (C2B) payments.

More time for operations. Traditionally, organizations would have had to strike up a relationship with a bank when they moved into a new region. Naturally, this costs and it’s very time-consuming. Using virtual IBANs removes this time-intensive process and frees up human resources to focus on more important tasks, such as growth opportunities.

Alternative payment solutions. Multiple payment options are vital for sales. With virtual IBANs, businesses can easily set up additional virtual IBANs with alternative bank accounts to use as backup payment options.

Virtual IBANs are building a global business ecosystem

As consolidation between online banking and payments grows, we are edging closer to a secure, interoperable global transaction ecosystem. Virtual IBANs have quickly become a key component of payments within this growing ecosystem since trust, security, and regulation are vital whenever funds change hands. 

By using virtual IBANs, these businesses are participating in this modern, global financial ecosystem and throwing off the restrictions applied by traditional, outdated banking infrastructure. Adopting virtual IBANs for your global B2B payments will simplify transaction processes, save you time, cut costs, and perhaps even unlock your next growth opportunity.