Frequently asked questions about vIBAN
What is a virtual IBAN (vIBAN)?
A virtual IBAN (or vIBAN) is an alternative bank identifier, linked to an existing current account but distinct from the primary IBAN. It functions as an alias: funds received on a virtual IBAN are automatically credited to the linked account, without creating a new bank account. Virtual IBANs can be bidirectional, meaning they can be used both to receive payments (collections) and to issue them (outgoing transfers, direct debits).
Their primary benefit is to enable precise identification of each transaction: by assigning a unique virtual IBAN to each client, supplier, or project, accounting reconciliation becomes automatic, even if the transfer reference is empty or incorrect. At Memo Bank, virtual IBANs can be generated autonomously (from the interface or via the banking API) and are available for use immediately.
Do Memo Bank virtual IBANs help reduce fraud risk?
Yes, virtual IBANs are an effective tool for reducing fraud risk. By using virtual IBANs for your transactions, your bank accounts' primary IBAN is never exposed publicly, which limits the risk of attack from fraudsters. If a virtual IBAN is compromised, it can be deactivated or deleted without changing your primary bank details. Virtual IBANs are useful to segment your transactions and significantly reduces your exposure to fraud. Virtual IBANs can be used in addition to Memo Bank Protect, Memo Bank's integrated anti-fraud solution, which automatically checks and scores the IBAN of your suppliers.
Can a VAT rate be assigned to a virtual IBAN?
Yes, Memo Bank allows you to assign a specific VAT rate to each virtual IBAN. Once this rate is defined, it will be automatically applied to all transactions associated with that virtual IBAN. This feature is particularly useful for businesses managing multiple activities subject to different VAT rates, or those that need to allocate their collections by tax category. It simplifies accounting by automating a step that is typically manual and prone to error.
How to create and manage virtual IBANs at Memo Bank?
Virtual IBANs can be generated and managed in two ways at Memo Bank. From your Memo Bank workspace, you can create a virtual IBAN in just a few clicks, assign it with a specific label, link it to a specific current account, and configure its settings (VAT rate, use for outgoing transfers or direct debit mandates).
For businesses with automation requirements, Memo Bank's banking API enables virtual IBANs to be created, modified, and deleted and instantly. At any time, you can temporarily deactivate a virtual IBAN (all operations on that IBAN will then be rejected), or delete it permanently.
What is the difference between a virtual IBAN and an additional current account?
A virtual IBAN and an additional current account serve different purposes. An additional current account is a physical bank account with its own balance, statements, and accounting records. A virtual IBAN, by contrast, is an alias linked to an existing current account: it has no balance of its own, and funds received are credited directly to the linked account. The advantage of a virtual IBAN is that it enables you to segment and identify your transactions without multiplying bank accounts, which simplifies your banking reconciliation. You can create a large number of virtual IBANs (hundreds or even thousands) with no significant additional cost, whereas opening additional accounts incurs both costs and increased management complexity.
Do virtual IBANs work for international transfers (SWIFT)?
Transfers routed through a virtual IBAN follow exactly the same processing path as standard transfers. This includes international transfers within certain countries of the SEPA zone. Funds are credited to the main account in the same currency, with no change to the banking processing. For SWIFT transfers outside the SEPA zone, it is recommended to contact your Memo Bank account manager to verify compatibility based on the currency and destination country.
Virtual IBANs remain primarily optimised for SEPA operations (euro transfers and direct debits).
What are the most common use cases for virtual IBANs?
Virtual IBANs are used across many sectors. In property management, each flat is assigned a distinct virtual IBAN, enabling rental income to be automatically identified and disbursements to landlords to be triggered. In insurance and brokerage, virtual IBANs enable collections to be segmented by contract or client.
For service platforms and fintechs, they facilitate automatic reconciliation of payments at scale. Multi-activity businesses use them to separate transactions by department or expense category (food, payroll, marketing, etc.). Finally, they are particularly useful for businesses subject to fund ring-fencing requirements.
