If you are a business owner, then you might have heard all about virtual bank accounts. If not, this blog will help you understand what a virtual bank account is and how it works.
Most business owners who deal with thousands of bank accounts find it difficult to reconcile or track the payment. The whole process of reconciliation and tracking takes days which is a lot for a growing business. This is where virtual bank accounts come as a rescue for all business owners.
It is an account provided by the bank which works as the substitute for the main physical account. Using this account, one can manage all the processes very quickly.
Virtual accounts allow you to arrange, separate, and combine data with ease. Businesses can customize data to meet their requirements. This account makes it simple to monitor payments and refunds, allowing for real-time payment settlement, notably in the setting of B2B money transfer.
How Does Virtual Bank Account Work?
The virtual bank account works digitally. The primary process involved is mentioned below.
1. Open An Account
The very step of having a virtual bank account is when the client opens an account with a virtual bank. The process involves filling out the form and submitting all the necessary documents required by the bank. Sometimes you need to submit a physical copy of the form to the bank, or you can try to mail it to bank authorities. Then the bank will take time to verify the documents, and as soon as the account is authenticated, you can transfer money to the account.
2. Transferring Fund In
Most people don’t know how to transfer money in a virtual bank account. It works in a way like many traditional banks. Either you can deposit the money using a paycheck in the virtual bank account, or you can transfer money from another bank into an account. Further, customers can also snail-mail into the virtual bank account.
3. Transferring Funds Out
Now comes the section on how to transfer funds out from the virtual bank account. As we said earlier, this account works like a traditional account. Here also you can get debit cards or apply for checkbooks. Using a virtual bank account, one can pay their phone and electricity bills. And, the best part about a virtual bank account is one doesn’t have to pay ATM withdrawal fees.
Benefits Of Virtual Bank Accounts
There are many benefits of virtual bank accounts. Some of them are listed below:
1. Easy to Use
Virtual accounts are straightforward to use. And if a customer faces any difficulty, there are guidelines or documentation that can help him with the process. This process takes little to less time, while the same thing can go up to days in the physical account.
2. Lower Fees
The popularity of virtual bank accounts is its lower fees compared to the transferring fees associated with physical bank accounts. While using virtual bank accounts for international payments, either a portion of the price or no charges at all will be asked by the bank. This is why many organizations that have overseas clients love to use virtual bank accounts.
3. Quick Account Access
Virtual accounts have the advantage of allowing you to have complete power over your money with just mobile and internet connectivity. You don’t have to visit a bank, to make currency exchange, and do other payment duties.
Virtual banks use a high-security architecture that allows for device encryption, ensuring that all client data is safe. You are eventually protected against internet fraud and account theft.
That’s it! Here you get all the necessary information about a virtual bank account and how it works.