A common misconception among fintech developers is that a Virtual IBAN is a real bank account. It is actually just a virtual address for deposits.
When a fintech opens a bank account, they get an Omnibus (Pooled) Account holding all customer funds.
Distinguishing Customers
This is where Virtual IBANs come in. A unique IBAN is generated for each user. It doesn't represent a real account but is mapped internally to the user.
When funds are sent to it, they land in the Omnibus Account, but your system credits the right user based on the IBAN.
- The bank doesn't open separate accounts.
- Virtual IBAN is smart internal routing.
- All money stays in the Omnibus Account.
- Used for Inbound transfers only.
#Fintech#VirtualIBAN#OmnibusAccount#BankingDesign
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