How Do Virtual IBANs Work in the UK?
If you’re based in the UK, you might need to transfer money internationally. Usually, this is accomplished with an International Bank Account Number (IBAN) — but virtual IBANs can provide even greater advantages.
Key Takeaways
- Virtual IBANs can be used for cross-border transfers, and they also provide advanced options for account management
- Virtual IBANs allow users to access the payment systems in various regions to save on transfer and exchange fees
- You can obtain virtual IBANs through Payset and other services
What Are Virtual IBANS?
IBAN numbers help banks and payment services route transactions to the right accounts. If you’re sending money, you’ll indicate the recipient’s IBAN at the time of the transaction. If you’re receiving money, you’ll share your own IBAN with the sender ahead of time.
IBAN numbers are useful for simple transactions. But what if you need to receive money in several different currencies, or you have funds flowing from several different origins?
That’s where virtual IBANs come in: they can be used to funnel payments to a single master or pooled account.
Often, this feature is used to handle foreign currencies, as each virtual IBAN can be assigned to an account for a unique currency.
Virtual IBANs can also be used to improve transaction routing in other ways. For example, you might share particular IBANs with certain clients or customers, making it easier to keep track of where certain payments came from.
How Do Virtual IBANs Work in the UK?
The UK has used the IBAN system since April 2001, allowing for streamlined transactions with dozens of other countries that use the system. Even though IBANs are international, the UK uses a specific format that applies to Great Britain, Northern Ireland, and certain other regions. You can see more specific details about where this format applies at IBAN.com.
In the UK, IBANs are only mandatory for international transfers. When it comes to domestic or local transfers, individual banks and payment services may ask for account information in any format, including IBANs. You should be prepared to provide that information as needed. What Do UK IBANs Look Like?Here’s an example of a virtual IBAN for a UK bank account:
GB 99 NWBK 0000 0012 3456 78
The code is invalid, but it will help you to identify each part of an IBAN.
- GB is the country code (“GB” represents the United Kingdom)
- 99 is the check digit code
- NWBK is the bank code (in this case, National Westminster Bank)
- 000000 is the branch code or sort code
- 12345678 is the account number
The IBAN contains a Basic Bank Account Number (BBAN), which is simply the IBAN without the first 4 digits: NWBK00000012345678.
You can also construct a domestic bank code from the sort code and account number. It should look like this: 00-00-00 12345678.
Depending on the country that you are transacting with, you may need to use a SWIFT/BIC code alongside (or instead of) an IBAN. Refer to your financial service provider to find out if you need to use SWIFT/BIC codes.
How Can I Find and Use My IBAN?
If you’re receiving money, you’ll need to locate your IBAN and share it with the party that is sending you money. Look for your IBAN in your online financial account, on an account statement, or by talking to your service provider.
It’s usually safe to share your IBAN or virtual IBAN. On its own, an IBAN only allows other people to deposit to — not withdraw from — your account. Still, it’s best practice to share your IBAN only with people you trust.
If you’re sending money, you don’t need to share your IBAN. Instead, ask the recipient for their IBAN ahead of time, then send money to that account.
In both cases, it’s important to ensure that you have the correct IBAN so that the transaction reaches its proper destination. You can validate an IBAN using a variety of online tools, including IBAN.com’s IBAN checker.
Benefits of Virtual IBAN
Virtual IBANs have several benefits over regular IBANs and other types of account identifiers. For example:
- Faster payments. Virtual IBANs can streamline your business’ handling of funds, allowing you to make use of cross-border payments more quickly.
- Multi-currency support: Virtual IBANs allow you to receive and hold multiple foreign currencies without the need to convert to a single currency.
- Easier foreign currency conversion: If you don’t need to hold a foreign currency, virtual IBANs can streamline the process of converting select funding streams into your desired currency.
- Better account organization. You can reserve virtual IBANs for specific senders or purposes, making it easier to keep track of your accounts.
- Easy setup. Electronic money institutions (EMIs) generally offer virtual IBANs, but traditional banks rarely offer them. You can often set up a virtual IBAN account more quickly than a traditional bank account.
How Payset Can Help
Payset provides virtual IBANs that give you the ability to send funds in up to 38 currencies to over 180 countries and exchange 38 currency pairs.
Plus, enjoy competitive fees, real-time exchange rates, and more.
Frequently asked questions
What is a multi-currency account/virtual IBAN?
A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.
You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.
A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.
- Funds can be deposited and withdrawn from the account for a small fee.
- Account holders can send and receive money with other Payset users for free.
- Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS.
- Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
- We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days
Are there limits on the amount of money I can send and receive?
No, there are no transaction limits on Payset multi-currency accounts.
However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.
How is Payset regulated?
Payset is regulated as an authorized Electronic Money Institution by the UK Financial Conduct Authority. Our activities are also regulated by the Payment Services Regulation 2017 and the Electronic Money Regulation 2011 (SI 2011/99).
How do I add money to my account?
How do I send money from my account?
Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.
Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.
Types of Multi-Currency Accounts
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