The difference between an IBAN and a virtual IBAN

If you live within the EU, IBANs are essential to your everyday banking experience, as you need an IBAN to send and receive money. But have you heard about virtual IBANs? Or maybe you are confused about how the virtual IBAN differs from a regular one?

Today, Genome will answer all these questions! Let’s first brush our knowledge on what the regular IBAN is and then dive into the distinction between these two terms. 

What is an IBAN, and why do you need it?

It is an International Bank Account Number, using which you can make and receive international money transfers, most commonly in the EU and the SEPA zone. 

But why are IBANs required for funds’ sending operations? Well, this number contains all the necessary data about the beneficiary to make transfer operations more precise. Let’s break this number down with an example:   

GB 43 NWBK 597247 04104XXX 

Here’s all the information this IBAN displays:

1. The first two letters correspond to the ISO code of the country. In this case, it stands for Great Britain;
2. The next two are check digits – the algorithm calculates them based on all the digits in your IBAN. Thus, if you have mixed up some numbers in the IBAN, the check numbers will help figure that out during verification;
3. Then follows a bank code, which represents the bank. Here, it is NWBK, which stands for the National Westminster Bank. Note that bank codes can be both represented via characters and digits;
4. And 597247 digits are for the bank branch code; the code can vary in length, sometimes consisting of only two digits; 
5. The final digits (04104XXX) stand for the account number.

Note that the IBAN’s length differs from country to country, it can be up to 34 characters long. According to the IBAN’s website, currently, there are:

• 82 IBAN participant countries;
• 36 SEPA participant countries;
• 23 countries with a partial or experimental use of the IBAN system;

To make a transfer within Europe, you are usually required to know:

• Beneficiary’s name;
• Their IBAN;
• Their SWIFT code (not always);
• Their address (not always);

Now that we clarified the IBAN’s purpose and structure, let’s talk about the virtual IBAN.

What is a virtual IBAN, and how does it compare to the regular IBAN?

Based solely on the name, you may think that virtual IBAN (also known as vIBAN) is just another term for a regular IBAN. And, at first sight, you are right: the structure of both is the same. But there’s more to it:

First of all, the virtual IBAN allows transfers to an online account rather than a traditional bank account. It is usually easier to get a virtual IBAN, as the application process is online, and you have to deal with the bureaucracy of traditional banks.  

Let’s take a look at another significant difference. With your regular IBAN, it matches your bank account, allowing you to receive and send funds in one currency. But virtual IBANs present a multi-currency option. So, you can have separate virtual IBANs for sending and receiving different currencies, and the money you receive to them will be rerouted to one singular account. 

As you can imagine, vIBANs are a very convenient tool for companies that accept payments from clients internationally or pay contractors that live all over the world. Virtual IBANs allow them to pay in the currency of the beneficiary’s location and save funds, and receive funds in multiple currencies, which will all be rerouted to one place.

Get a dedicated IBAN at Genome!

No matter if you are looking for an IBAN for personal reasons or require one for your company, Genome covers all the bases! 

We offer personal, and business euro IBAN accounts for all your needs for payments and transfers within Europe! Moreover, with Genome, you can have multiple accounts in different currencies: EUR, USD, and GBP. 

And these are only the basic perks you get with our wallets, as Genome also offers virtual and physical cards, merchant accounts*, mass transfers, sophisticated reports, and more.

And if you need to receive payments from customers internationally – no worries. Genome’s merchant account* allows your customers to pay in over 20 currencies. They can use cards or 40+ local payment methods to do so*. Learn more about it all on our website. 

*Please note that Genome’s merchant services have been temporarily unavailable since September 2024.

FAQ

How do I open a virtual bank account?

You can do so online! First, determine what financial features you need and analyze potential providers you’d want to partner with. 

Then, it’s application time: you will likely need to provide some documents for identity verification. And if you need a business account, you will also need to provide documents and fill out some details about your company. 

How does a vIBAN work?

You can apply for the virtual IBAN online, and you will likely have an option to open multi-currency IBANs. These will allow you to send and receive funds in different currencies, and all the money will be rerouted to one account. 

What are virtual IBANs

It is a virtual International Bank Account Number used for transfers. It is similar to a regular IBAN but also has a multi-currency feature and allows rerouting payments from all the vIBANs to one account.