Glossary
Virtual IBAN
A virtual IBAN (vIBAN) is a unique bank account number that functions like a standard IBAN for receiving and identifying payments, but is not tied to a physical bank account in the traditional sense. Instead, it is a routing identifier that directs incoming funds to an underlying master account, while giving each user, transaction, or programme a dedicated, uniquely identifiable account number.
What It Is
IBAN stands for International Bank Account Number: the standardised format used across SEPA and internationally to identify bank accounts for payment routing. A virtual IBAN follows the same format and is fully functional for receiving SEPA credit transfers and, depending on the provider, SWIFT payments, but it is issued programmatically via BaaS (Banking as a Service) infrastructure rather than requiring the opening of a physical bank account.
On an SCF platform, every buyer and supplier can be issued a dedicated virtual IBAN at onboarding. This IBAN identifies their account on the platform uniquely, routes incoming payments correctly, and provides a stable address for receiving early payment disbursements, settlements, and transfers.
Virtual IBANs transform the operational mechanics of supply chain finance: rather than managing complex payment reference matching or routing funds through a single pooled account, every transaction is naturally attributed to the correct party through their dedicated IBAN.
How Virtual IBANs Work
Issuance: The platform issues a virtual IBAN to each user via BaaS infrastructure at onboarding, typically within minutes.
Receiving payments: Payers send funds to the virtual IBAN exactly as they would to any bank account, via SEPA credit transfer, SWIFT, or faster payments.
Routing: The BaaS provider’s infrastructure routes incoming funds to the correct underlying ledger, attributed to the correct user.
Balance management: The user’s balance is visible in real time on the platform; funds can be held, transferred out, or deployed within the platform.
Outgoing transfers: Depending on configuration, users can send payments from their virtual IBAN to external accounts, making it a fully functional embedded business account.