Virtual Account

Topics

 Virtual Account
 How do Virtual Accounts work
 Virtual Account Number
 Features of Virtual Account
 Virtual Account vs Physical Account
 Advantages of virtual bank accounts for businesses
 Virtual Account
 Virtual accounts are unique account numbers assigned within traditional, physical bank
accounts, which are also known as settlement accounts.
 They can be used to send and receive money on behalf of the settlement account, where the
funds are ultimately held. Businesses tend to create multiple virtual accounts, with each one
designated to a specific client, transaction, entity, or any other business reason
 Virtual account number is generated by the system, is exclusive, and is based on logic.
 Virtual bank accounts, or online bank accounts, are a type of bank account that operates entirely
through mobile or desktop interfaces..
 In India, for example, virtual accounts are provided by banks such as Axis, ICICI, HSBC, and so
on while these virtual accounts and their activities are regulated by the RBI
 Virtual Account Number

 A Virtual Account consists of a unique customer ID number

 It means that there will be no Virtual Account number that is exactly the same.
So, each transaction can be identified automatically for different customers.
 When the transaction is complete, they do not need to send a transfer receipt
anymore.
 How do Virtual Accounts work
 Creating multiple virtual accounts mapped
to the same account,it becomes easier to
reconcile different incoming transactions
into a bank account.
 Eg - When adding cards to Google Pay a
virtual account number is created in place of
your card account number
 This number is used when you make a
payment with Google Pay (or a refund of
that payment), so that your card account
number isn't shared with the merchant and
won't appear on the receipt.
 Features of Virtual Account
 Highly secure platform - Virtual accounts function on highly secure platforms and therefore
provide a guaranteed level of security. Virtual accounts use virtual IBANs which are encrypted to
ensure consumer data is always kept secure.
 Ease of access to banking services - a traditional bank account, virtual accounts do not require
a physical location to operate out of, This makes for much easier access to banking services.
Virtual accounts can be easily accessed online from a mobile device or a desktop, anytime and
anywhere.
 Multi-currency support -Virtual accounts is multi-currency support. You could be based out of
one country and still pay and receive money in multiple currencies from different countries.
 Easy reconciliation - many businesses to start using virtual accounts is that you can automate
payment reconciliation, which is useful for both one-time and recurring payments from
customers.
 Virtual Account vs Physical Account
Virtual Account
 As the name suggests, virtual accounts only
exist virtually, Virtual accounts are also
temporary as they cannot store funds
 Opening a virtual account is easy, as there isn’t
a KYC process necessary.
 There are different types of virtual accounts
you can create. Depending on whether you
need them for single or multi-use
Physical Account
 A Physical bank account has a physical
existence, meaning that you can use it to store
your funds.
 While Physical bank accounts have their own
role in storing funds and settling money,
opening a bank account can be tedious and
requires documentation.
 Physical bank accounts don’t offer much
personalization. While there may be several
options available to you when opening the
account
Advantages of virtual bank accounts for businesses
 Businesses can allot different virtual accounts for vendors, freelancers, utility
bills and subscriptions to streamline transactions
 Facility to accept payment via various modes such as UPI, NEFT, RTGS, IMPS, and
QR
 With the proper documentation of each transaction, there are zero chances of
manual error
 Ability to build a separate wallet for consumers to receive, send or even request
funds
 Can use the virtual account as an escrow account to protect the business from
online fraud
 Quick transactions and confirmation to ensure timely payments to service
providers to maintain healthy business relations
Thank You