In recent years, the improvement of payment technology has led to major breakthroughs in cross-border payments, allowing businesses to effectively expand into international markets that they otherwise wouldn’t be able to reach.
One of these breakthrough technologies is virtual IBANs, which are fast becoming an integral part of embedded finance. This article takes a look at what they are and how they can benefit your business.
But first of all, let’s take a quick look at embedded finance as a whole.
What is embedded finance?
Embedded finance enables businesses to integrate a range of financial services into its infrastructure. It’s becoming increasingly popular in the FinTech world as more businesses begin to realise the benefits of creating a customer-centric end-to-end service that maximises engagement and conversions.
Overall, when a business has invested in embedded finance, you can expect seamless customer journeys that offer a fantastic user experience (UX).
Virtual IBANs are just one of the many options that you can incorporate into your embedded finance ecosystem. Plus, if you opt for a no-code approach to embedded finance, you can easily integrate virtual IBANs with an array of other solutions and get it up and running without needing to modify any underlying codebase.
You can find out more about the benefits of no-code here.
What is a virtual IBAN?
In short, it’s a digital representation of a real-world bank account.
You’re probably already familiar with standard IBANs – they’re the long strings of characters that are used to identify bank accounts internationally.
Virtual IBANs work in exactly the same way, except they don’t physically exist. This might sound like a small difference, but it actually has a big impact on both efficiency and costs when sending money overseas.
Otherwise known as an International Bank Account Number, it consists of a unique account number that’s been specifically generated for your business. It’s used to send and receive payments from customers and clients and can be used in conjunction with other virtual accounts to make cross-border payments much more efficient.
This is an important part of embedded finance as it allows businesses to offer their customers a local banking experience, regardless of where they are in the world.
What are the benefits?
There are a number of benefits that come with using virtual IBANs, especially when it comes to making cross-border payments.
Some of the key benefits include:
- Cost-effective: When you use virtual IBANs for cross-border payments, you can avoid the high fees that are typically associated with traditional methods such as wire transfers.
- Time-saving: Virtual IBANs make it possible to send and receive payments in real-time, which can save your business a considerable amount of time.
- Improved security: With virtual IBANs, you can be sure that your payments are secure and that your confidential data is protected.
- Enhanced customer experience: Thanks to the improved efficiency and security that virtual IBANs offer, you can provide your customers with a much better overall experience.
- Expand your business’s reach: By offering virtual IBANs to your customers, you can grow your business by expanding operations into new international markets.
- Keep things simple: There’s no need to negotiate contracts with different banking providers in various territories. Instead, you can use virtual IBANs to streamline your cross-border payments.
Overall, virtual IBANs offer significant advantages, making them a highly attractive option for businesses looking to expand into new markets and make seamless cost-effective cross-border payments. So, if you’re not already using virtual IBANs in your business, then now is the time to implement them as part of your embedded finance strategy.
To find out more about how your business can benefit from virtual IBANs and other embedded financial services at Orenda, get in touch.
