Virtual IBAN Providers [Opening Guide]

Virtual IBAN providers offer a valuable service to businesses and individuals in need of fast, low-cost transfers and multi-currency accounts. But, not all virtual IBAN providers are created equal (or worth using).

So, before choosing which virtual IBAN providers you’re going to open accounts with, make sure you review the challenges, opportunities, and common mistakes covered in this article.

And before getting started, if this is your first time visiting GlobalBanks, don’t forget to download our FREE Non-Resident Banking Starter Guide. It’s designed to help you find and open accounts around the world, including in countries that offer accounts with an IBAN.

Where Virtual IBAN Providers Operate

At the time of writing, there are 77 countries using IBAN as their primary means for facilitating bank transfers. Out of these 77 countries, 49 are in Europe, 37 of which are in the Single Euro Payments Area (SEPA), and 30 of those are in the European Economic Area (EEA).

In other words, if you’re looking for virtual IBAN providers, there’s a strong chance that you’re looking for an account in Europe.

Of course, there are 28 other countries outside of Europe that offer IBANs too. These 28 countries include popular offshore jurisdictions like the British Virgin Islands, Seychelles, Mauritius, and even the UAE.

But, given Europe’s dominance, this article will focus on opening accounts with virtual IBAN providers in Europe only — we’ll look at the other 28 countries in a future article.

Benefits of a Virtual IBAN Provider

Virtual IBAN Providers Benefits
If you’ve read any of our past articles on electronic money institutions (EMIs), fintech, or digital banks, you’ll know that we don’t suggest using these platforms as your primary method for holding deposits. You can read about the reasons for this in past articles here.

That said, we’ve also stated that these platforms do offer individuals and businesses some value in certain instances. Well, the same is true for virtual IBAN providers.

In fact, virtual IBAN providers can often be more cost-effective for foreign currency transactions, have faster transaction time, provide access to a wider range of currencies, and cater to specific client groups in other innovative ways.

Additionally, while opening accounts with traditional banks becomes increasingly difficult each year, virtual IBAN providers are often easier to open accounts with — more on this later.

Here are a few reasons why you might want to consider opening accounts with virtual IBAN providers in Europe.

  1. 100% remote opening
  2. Faster account opening than traditional banks
  3. Access to both business and personal accounts
  4. Access to SEPA, SWIFT, and low-cost international transfers
  5. Offer a wider range of international currencies
  6. Access to virtual and physical payment cards (prepaid & debit)
  7. Digital-first platforms sometimes offer a better user experience
  8. Crypto friendly accounts to send and receive transfers from exchanges

How to Choose a Virtual IBAN Provider

Virtual IBAN Providers Options
When it comes to choosing a virtual IBAN provider, there are six main factors that every applicant must consider. Knowing how your virtual IBAN provider ranks on these factors before applying for an account is critical.

In fact, applying carelessly for multiple accounts at virtual IBAN providers without knowing what you’re doing can get painfully expensive. Especially if you have a business.

For example, it’s not uncommon for business applicants to get hit with account opening fees of over 1,000 EUR just to review an application. And that’s without a guarantee of an account ever being opened!

So, be prepared, select your virtual IBAN provider carefully, and don’t get trigger happy with applications. Your wallet will thank you.

Here are the six factors to consider when assessing virtual IBAN providers:

  1. Customer Eligibility
  2. Risk Appetite
  3. Services Offered
  4. License Type
  5. Limitations & Restrictions
  6. Fees

1. Types of Customers Accepted by Virtual IBAN Providers

Virtual IBAN providers tend to specialize in one type of client. Their client specialization can be as broad as individuals or businesses, or they may target very niche subcategories.

For instance, individual client subcategories may include local resident clients, EEA residents, foreigners, non-residents, or expats.

Meanwhile, business clients may be broken down into a variety of pre-determined client subcategories, depending on where the company is incorporated, the nationality and residency of the owner, the type of business, and the perceived risk level which we’ll discuss below.

Knowing which client types a virtual IBAN provider can realistically accept, including their subcategories, is critical.

For example, if you’re a non-EEA resident and you apply to a provider who only allows EEA residents, you’ll be automatically rejected.

Likewise, if you have an offshore company and apply to a virtual IBAN provider that only accepts companies from specific countries or regions, you’ll be rejected again.

The bottom line is to know the client categories you fall into and make sure you choose virtual IBAN providers that will actually accept you or your business before applying.

2. Risk Appetite of Virtual IBAN Providers

Risk appetite refers to whether the virtual IBAN provider is open to low-risk or high-risk clients.

An example of a low-risk client for a virtual IBAN provider in Europe might be a European citizen living in Europe. On the other hand, an example of a high-risk client is a UAE company owned by a foreigner with no ties to Europe.

Another important consideration related to risk appetite is the price — that’s because there is usually a very clear relationship between the cost of using a platform and the level of risk that the platform is willing to accept. In other words, the higher risk you or your business are, the higher your fees will be.

But, this isn’t just an issue with virtual IBAN providers, the same scenario plays out with traditional banking as well. In most cases, high-risk clients will be expected to deposit more. In many instances, they also pay upfront fees in order to offset the costs of extra due diligence and the monitoring required for their accounts.

3. Services Offered

Virtual IBAN providers offer different services, usually based on different client groups that they’re targeting. The most common combination of services offered by virtual IBAN providers include:

  • Personalized IBAN number
  • Multi-currency accounts
  • Virtual or physical debit card
  • Foreign exchange services
  • SEPA and/or SWIFT transfers

In most instances, you’ll be able to spot the services a virtual IBAN provider is offering on their website. But, sometimes, it’s not so obvious. And, you have to dig deeper for answers.

For example, many virtual IBAN providers aren’t clear about their shortcomings and limitations — instead, they’re hiding in the fine print. So, regardless of which IBAN provider you apply with, do your research and make sure they actually have the specific capabilities you need.

4. License Type

Finally, knowing what type of license your virtual IBAN provider has can impact the services they can offer, how safe your money is, and what their limitations are. Fortunately, this information is pretty easy to find since license holders are usually required by law to list the name of the specific license they hold on their website.

But, that’s not always the case…

For example, upon closer examination, you might notice that a lot of virtual IBAN providers are not licensed at all. Instead, they rely on the licenses and permissions that other virtual IBAN providers have obtained. Essentially, some virtual IBAN providers “rent” a license from another license holder, which in turn allows them to offer services.

You will see this for digital banks, electronic money institutions, payment institutions, as well as Mastercard and Visa licenses for card issuing.

Of course, just because a virtual IBAN provider has a license doesn’t mean they’re great either. In fact, you may find that in some instances the virtual IBAN provider renting a license provides a much better service than the provider they rent from.

5. Limitations & Restrictions

Virtual IBAN providers also have very different limitations and restrictions.

Unfortunately, most applicants don’t realize these shortcomings until after the account is open — when they discover that a certain feature or capability is unavailable.

Many virtual IBAN providers aren’t clear about their shortcomings and limitations. So, it’s important to know which questions to ask to make sure they meet your needs.

Here are some examples of restrictions and limitations that virtual IBAN providers might not highlight:

  • No SWIFT transfers
  • No SWIFT outgoing transfers
  • SWIFT access is only available to pre-approved clients
  • Limitations for the size, number, or frequency of transactions
  • Payment cards not available to non-EEA individuals or businesses
  • No physical debit card (only virtual)
  • Transfers sent as the provider (not in your name)
  • No transfers to or from crypto exchanges
  • No transactions allowed with certain countries
  • And more…

Regardless of which virtual IBAN providers you choose, do your research beforehand, read between the lines, and make sure they actually have the specific capabilities you need.

6. Fees Charged by Virtual IBAN Providers

When it comes to fees, virtual IBAN providers are all over the map. Some are incredibly affordable and charge very few fees at all. Others are painfully expensive, with high fees at each and every step of the application process as well maintenance costs after the account is open.

In most cases, the fees that virtual IBAN providers charge often center around two core areas: Client Type and Risk Appetite.

The more exotic the structure and the higher the risk level the more a virtual IBAN provider will charge to open and maintain an account.

However, this isn’t a firm rule. In some cases, you can actually find low-cost virtual IBAN providers willing to open accounts for offshore companies and more high-risk individuals and entities — you just need to know where to look.

In all cases, it’s critical to understand the fee structure of each virtual IBAN provider before applying for accounts. Otherwise, you might pay extortionate fees just to open an account — and maintenance and closing costs can get very high as well.

Red Flags of Virtual IBAN Providers

Virtual IBAN Providers Red Flags
Before discussing how to open accounts with virtual IBAN providers, let’s take a quick detour and discuss a few red flags to watch out for.

Not surprisingly, many of the red flags you need to watch out for in banking also apply to virtual IBAN providers.

That said, virtual IBAN providers are often a higher-risk alternative than international banking options. That’s due to looser regulations, less scrutiny on their financial health, and sometimes because of the jurisdictions where they are governed.

With this in mind, here are a few of the important questions to consider:

  1. Which banks does the virtual IBAN provider have correspondent bank relationships with?
  2. Does the virtual IBAN provider have their own license or do they rent?
  3. Does the virtual IBAN provider offer a personalized IBAN account?
  4. Do they have a direct relationship with Visa or Mastercard or do they use a third-party platform? And, are you even eligible for a debit card?
  5. Does the virtual IBAN provider have a past history of regulatory or compliance lapses?

There are several other questions you should ask when determining whether a virtual IBAN provider is a good fit. However, if you are able to answer the above questions and still feel comfortable with the platform, that’s a good starting point.

Opening Accounts With Virtual IBAN Providers

Unlike opening accounts at traditional banks, the account opening process is 100% remote. In fact, most applicants open accounts without ever interacting with another human.

But, in most cases, you’ll still need to provide the same supporting documents. You also need to complete ID verification and you may even need to attend an interview.

In fact, the entire account opening process is very similar to opening an account with a traditional bank. However, the speed of account opening and reassurance that you’ll never need to leave your home are major wins.

Now, because virtual IBAN providers make the account opening process so straightforward, you might be wondering what the magic is to successfully getting an account open. Well, it’s all about selecting the right virtual IBAN providers in the first place.

To help you with this, our team has published a series of premium reports on virtual IBAN providers. The reports highlight providers for non-EEA resident individuals and businesses in Europe.

Here’s a quick overview of the reports:

European EMIs for Non-Resident Individuals

The first report in the series is dedicated to helping non-EEA residents open accounts in Europe with virtual IBAN providers.

Virtual IBAN Providers for Individuals

European EMIs for Non-Resident Businesses

The second report is dedicated to helping non-EEA businesses open accounts with virtual IBAN providers in Europe and the UK. It includes solutions for foreign, non-resident, offshore, and even high-risk businesses

Virtual IBAN Providers for Businesses
Both of these reports are immediately accessible to members of GlobalBanks IQ and GlobalBanks Insider. All you have to do to get access to them is to become a member of either service.

Start Opening With Virtual IBAN Providers Now

To start opening accounts with virtual IBAN providers in Europe and the UK, you can obviously use the information that we’ve shared in this article.

Or, you can access one of our membership services and start taking action today.

Each of our membership services helps non-resident individuals, foreigners, and their businesses open international bank accounts.

Whether you need personal, private, business, offshore, or an account with virtual IBAN providers — we have an account opening solution that will work for you.

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Here’s a quick overview of how to start:

If you’re ready to take action and start opening international accounts now, you can access GlobalBanks IQ, our dedicated international banking intelligence platform.

GlobalBanks IQ gives you everything you need to start finding and opening accounts for you or your business today.

When you join GlobalBanks IQ, you immediately unlock the GlobalBanks Database of international banks — home to 250+ banks in 50+ countries. 

And, you get access to our library of premium (members-only) reports, including proven account opening strategies, country-specific banking options, and lists of banks for specific client types.

Plus, you unlock our account opening checklists, dedicated account opening alerts, and much more. 

To get started, click here to see if GlobalBanks IQ is the right choice for you to start accessing the benefits of international banking today.

You can also view all of the account opening solutions offered by GlobalBanks on our products page.

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