Payments glossary · Methods
Virtual IBAN
A virtual IBAN (vIBAN) is an account number in standard IBAN format that routes incoming payments to an underlying master account instead of being a separate account, so a business can give each customer, invoice or entity its own IBAN.
How Virtual IBAN works
An IBAN (International Bank Account Number) is the ISO 13616 account identifier used across Europe and many other countries. It is up to 34 characters long and made up of a country code, two check digits and the domestic account details, and Swift maintains the registry of national IBAN formats. A virtual IBAN looks identical to a normal one, but money sent to it lands in a master account held by the business or its PSP, tagged with the virtual number.
For merchants and platforms the main benefit is reconciliation: if every customer or invoice has its own IBAN, incoming bank transfers can be matched automatically without relying on payment references that customers often mistype. Virtual IBANs are also used to collect funds through local account numbers in several countries, and by marketplaces and PSPs to keep each client's funds identifiable.
There is no single legal definition of a virtual IBAN. A 2024 report by the European Banking Authority found differing interpretations across the EU, flagged money-laundering risks where the end user of a vIBAN may be unknown to the banks involved, and noted differing views on how the SEPA Regulation and the IBAN standard apply to vIBANs. Separately, the SEPA Regulation stops businesses in the EU from refusing euro payments to or from reachable accounts in other EU countries, a practice known as IBAN discrimination.