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VIBANs: A modern way to pay in MENA

VIBANs hero image
VIBANs hero image
VIBANs hero image

We’ve launched local AED VIBANs for our international customers. This blog explains what a VIBAN is, how it works and why this is an exciting update for MENA…

Cross border payments can be challenging - often expensive, inefficient and involve lengthy time delays. VIBANs allow businesses to quickly reconcile payments, increase acceptance rates by having the payment move in the name of the customer, and reduces the number of lost or unidentified transactions.

What is a VIBAN?

VIBAN = Virtual International Bank Account Number

Breaking it down, an IBAN is a unique code (up to 34 characters) which identifies an individual bank account both locally and internationally, in a globally accepted standard.

From the IBAN itself, you can determine which country has issued the account, the bank the account is held with, alongside the account and routing numbers required to settle a payment. Each country has a different standard for account details but crucially an IBAN normalises these into one simple set of characters that can be used by most payment systems.

UAE Ibans

A virtual IBAN functions in the same way but instead of matching with a physical bank account, it is an identifier that works within a pooled account. VIBANs can have any name attached to them, regardless of the details on the pooled account, and can make payments look and feel like a transaction made directly from the sender. 

Why is this useful? VIBANs are used in cross-border payments to route transactions with ease - increasing bank acceptance rates by making transactions in the correct name, allowing for efficient reconciliation by segregating incoming and outgoing funds by customer on their own unique address, and creating a single multi-currency experience that does not reveal the number of pooled accounts required to transact across currencies.  

VIBANs remove the need to create individual physical bank accounts for each customer, a process which is often impossible when making payments in countries where your end user ultimately doesn't reside.

What are the benefits

Icon streamlined recon

Streamlined Reconciliation

With VIBANs, each customer is assigned a unique address, ensuring that their payments are easily traceable. This account structure eliminates the common issues of co-mingled transactions and incorrect payment references. Each transaction is easily identifiable, making financial reconciliation smoother and more accurate.

Icon transparent transation

Transparent Transactions

One of the standout features of VIBANs is that they facilitate payments in the name of the customer, rather than the name of the pooled account. This ensures that payments appear to come directly from the customer, enhancing transparency and trust throughout the transaction process and increasing the acceptance rates at the receiving bank.

Icon easy setup

Quick and Flexible Setup

VIBANs can be created instantly (in bulk) and in an unlimited quantity. This promotes speed and flexibility as well as serving high-frequency use cases. It also reduces operational overhead of opening, maintaining and closing multiple physical accounts.

Icon fx

Multi-currency solution

A VIBAN allows payment companies with global coverage access to a multi-currency solution. A business can set up a single IBAN that accepts incoming and outgoing payments for various currencies. This increases customer satisfaction and reduces the operational load as payments can be made in a preferred currency to a single destination.

What is a VIBAN?

VIBAN = Virtual International Bank Account Number

Breaking it down, an IBAN is a unique code (up to 34 characters) which identifies an individual bank account both locally and internationally, in a globally accepted standard.

From the IBAN itself, you can determine which country has issued the account, the bank the account is held with, alongside the account and routing numbers required to settle a payment. Each country has a different standard for account details but crucially an IBAN normalises these into one simple set of characters that can be used by most payment systems.

UAE Ibans

A virtual IBAN functions in the same way but instead of matching with a physical bank account, it is an identifier that works within a pooled account. VIBANs can have any name attached to them, regardless of the details on the pooled account, and can make payments look and feel like a transaction made directly from the sender. 

Why is this useful? VIBANs are used in cross-border payments to route transactions with ease - increasing bank acceptance rates by making transactions in the correct name, allowing for efficient reconciliation by segregating incoming and outgoing funds by customer on their own unique address, and creating a single multi-currency experience that does not reveal the number of pooled accounts required to transact across currencies.  

VIBANs remove the need to create individual physical bank accounts for each customer, a process which is often impossible when making payments in countries where your end user ultimately doesn't reside.

What are the benefits

Icon streamlined recon

Streamlined Reconciliation

With VIBANs, each customer is assigned a unique address, ensuring that their payments are easily traceable. This account structure eliminates the common issues of co-mingled transactions and incorrect payment references. Each transaction is easily identifiable, making financial reconciliation smoother and more accurate.

Icon transparent transation

Transparent Transactions

One of the standout features of VIBANs is that they facilitate payments in the name of the customer, rather than the name of the pooled account. This ensures that payments appear to come directly from the customer, enhancing transparency and trust throughout the transaction process and increasing the acceptance rates at the receiving bank.

Icon easy setup

Quick and Flexible Setup

VIBANs can be created instantly (in bulk) and in an unlimited quantity. This promotes speed and flexibility as well as serving high-frequency use cases. It also reduces operational overhead of opening, maintaining and closing multiple physical accounts.

Icon fx

Multi-currency solution

A VIBAN allows payment companies with global coverage access to a multi-currency solution. A business can set up a single IBAN that accepts incoming and outgoing payments for various currencies. This increases customer satisfaction and reduces the operational load as payments can be made in a preferred currency to a single destination.

What is a VIBAN?

VIBAN = Virtual International Bank Account Number

Breaking it down, an IBAN is a unique code (up to 34 characters) which identifies an individual bank account both locally and internationally, in a globally accepted standard.

From the IBAN itself, you can determine which country has issued the account, the bank the account is held with, alongside the account and routing numbers required to settle a payment. Each country has a different standard for account details but crucially an IBAN normalises these into one simple set of characters that can be used by most payment systems.

UAE Ibans

A virtual IBAN functions in the same way but instead of matching with a physical bank account, it is an identifier that works within a pooled account. VIBANs can have any name attached to them, regardless of the details on the pooled account, and can make payments look and feel like a transaction made directly from the sender. 

Why is this useful? VIBANs are used in cross-border payments to route transactions with ease - increasing bank acceptance rates by making transactions in the correct name, allowing for efficient reconciliation by segregating incoming and outgoing funds by customer on their own unique address, and creating a single multi-currency experience that does not reveal the number of pooled accounts required to transact across currencies.  

VIBANs remove the need to create individual physical bank accounts for each customer, a process which is often impossible when making payments in countries where your end user ultimately doesn't reside.

What are the benefits

Icon streamlined recon

Streamlined Reconciliation

With VIBANs, each customer is assigned a unique address, ensuring that their payments are easily traceable. This account structure eliminates the common issues of co-mingled transactions and incorrect payment references. Each transaction is easily identifiable, making financial reconciliation smoother and more accurate.

Icon transparent transation

Transparent Transactions

One of the standout features of VIBANs is that they facilitate payments in the name of the customer, rather than the name of the pooled account. This ensures that payments appear to come directly from the customer, enhancing transparency and trust throughout the transaction process and increasing the acceptance rates at the receiving bank.

Icon easy setup

Quick and Flexible Setup

VIBANs can be created instantly (in bulk) and in an unlimited quantity. This promotes speed and flexibility as well as serving high-frequency use cases. It also reduces operational overhead of opening, maintaining and closing multiple physical accounts.

Icon fx

Multi-currency solution

A VIBAN allows payment companies with global coverage access to a multi-currency solution. A business can set up a single IBAN that accepts incoming and outgoing payments for various currencies. This increases customer satisfaction and reduces the operational load as payments can be made in a preferred currency to a single destination.

Pooled and Sub-accounts illustration

More about VIBANs in MENA

While IBANs are commonplace in places such as Europe or the UK, they’re not fully adopted across the globe. For example, North America, Australia,  New Zealand and China don’t offer IBANs but use SWIFT codes and routing numbers¹.

Since 2011, the Central Bank of the UAE (CBUAE) mandated local banks² to accept and process payments using an IBAN. This is relatively late given IBANs were adopted by the European Committee for Banking Standards in the late 90s. Within the region, IBAN infrastructure is widely integrated today. Countries such as Kuwait, Lebanon, Saudi Arabia, Tunisia and Turkey have implemented the IBAN format account identifiers³. However, local virtual IBAN solutions are not prevalent.

Currently, MENA is showing an uptick in demand for payment innovation. For example, the UAE’s digital payment market is forecasted to grow to $9 billion by 2028 - we recently discussed this projection here.

Two major reasons for this gap in the market:

  1. Local banks have not been required to adopt these new technologies as local payment companies simply need a settlement account to receive payments.

  2. Global interest in the region is a relatively new development. The global demand in this case preceded the local supply.

And, that’s where Fuse comes in.

We started Fuse with the mission to provide access to MENA for global companies. The major VIBAN use case is for international customers who cannot open physical bank accounts in the region. Our team has built VIBAN infrastructure to enable customers to receive and send payments using local rails. Our largest customers are international payment companies, platforms and enterprises looking to collect and pay out in the region. Our VIBANs provide a solution for high frequency use cases and multi-currency treasury management.

We’re optimistic about the region, and what our VIBAN solution enables for international companies (without the need for local operations and licensing). The world is focusing on the opportunities of the region, so we’re excited to build the infrastructure to support its growth.

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© 2024 Fuse Financial Technologies Inc. All Rights Reserved.

Fuse is authorised to conduct Money Services Business by the DFSA (FRN F009516), subject to the following conditions: i. its Licence is a restricted "Innovation Testing Licence”, and it is restricted under the Licence to testing its Services; and ii. due to the restricted nature of its Licence, normal requirements and Client protections may not apply and Clients may have limited rights if they suffer loss as a result of taking part in testing of its Services.


By using this website, you accept our Terms of Service and Privacy Policy.

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© 2024 Fuse Financial Technologies Inc. All Rights Reserved.

Fuse is authorised to conduct Money Services Business by the DFSA (FRN F009516), subject to the following conditions: i. its Licence is a restricted "Innovation Testing Licence”, and it is restricted under the Licence to testing its Services; and ii. due to the restricted nature of its Licence, normal requirements and Client protections may not apply and Clients may have limited rights if they suffer loss as a result of taking part in testing of its Services.


By using this website, you accept our Terms of Service and Privacy Policy.

LinkedIn

© 2024 Fuse Financial Technologies Inc. All Rights Reserved.

Fuse is authorised to conduct Money Services Business by the DFSA (FRN F009516), subject to the following conditions: i. its Licence is a restricted "Innovation Testing Licence”, and it is restricted under the Licence to testing its Services; and ii. due to the restricted nature of its Licence, normal requirements and Client protections may not apply and Clients may have limited rights if they suffer loss as a result of taking part in testing of its Services.


By using this website, you accept our Terms of Service and Privacy Policy.

LinkedIn