Virtual Account Numbers Facilitate International Digital Banking

To serve eCommerce companies’ needs, as transactions continue to shift online, banking needs to go digital, too. In an interview with PYMNTS, Lilia Metodieva, managing director at Monneo, said virtual international bank account numbers (IBANs) can help firms gain scale internationally, and customize payments to serve the needs of their end customers.

As has been profiled in this space previously, virtual IBANs serve as reference numbers issued by banks. Those numbers allow payments to be routed to regular bank accounts, but with platforms such as on offer by Monneo give online enterprises a single access point to obtain IBANs on offer from a collection of European banks. The network facilitates transactions across regional payment schemes and about 130 currencies, and regulatory and compliance tasks are streamlined and automated.

Platforms and single access points help bridge the gap between traditional banks and eCommerce. Traditional banking activities, done though traditional (brick-and-mortar) banking conduits can prove costly, unwieldy, paper-based and time-consuming — particularly as funds cross borders, payment schemes and currencies.

At a high level, Metodieva said, banking services “are an inseparable part of any business ecosystem — but especially of the eCommerce business ecosystem.” Each eCommerce firm, she added, has a different business model, which demands a different approach to transacting, collecting funds from customers and conducting day-to-day banking. As supply chains are international in scope, with suppliers stretched across different regulatory regimes (with different laws governing know your customer (KYC) and compliance efforts), friction points abound.

Adapting To eCommerce

“Banking services need to adapt to this [eCommerce] operational model, to be able to allow them to connect with their clients, with their payments service providers and with their partner. That is where digital banking and the virtual IBANs come in,” she said. Digital banking, is fully customizable, tied to, for example, whether the eCommerce firm will receive payments from acquiring banks or from payment services providers — or whether they will be paid directly from customers. On this last point, she said, more businesses grappling with the pandemic have started accepting banking transfers from their consumers directly for various kinds of services and goods.

Beyond solely collecting payment, she added, digital banking can be customized as firms pay their expenses, perhaps across a range of currencies.

With a nod toward the ongoing public health crisis, she said the coronavirus has served as a “tipping point for digital banking adoption and usage — because it creates a more convenient and safer payment environment” for traditional and digital-first firms alike.

“A number of businesses went completely online in 2020, and they need the cross-border, wide range of payment solutions to be able to interact and to be able to exchange goods and services,” she said, regardless of vertical. Traditional businesses have also switched online.

Regardless of vertical, or whether B2B or B2C focus, companies, like consumers, have gotten used to receiving services on demand, and with speed, with flexibility baked into the process.

Discussing flexibility, she said businesses can get access, through virtual IBAN, to many payment types. She pointed to faster payments, SEPA, SWIFT and multicurrency payments, resulting in lower operating costs. Those options, for example, include SWIFT multi-currency for international payments; SEPA Euro within the Euro zone; GBP Faster Payments and CHAPS in the U.K, to name just a few.