Virtual IBAN
A virtual IBAN is an account identifier in the same format as a standard IBAN that redirects incoming payments to a different underlying account, called the master account. Payment firms use them to give each customer or flow its own reference for automatic reconciliation.
How it works
The EBA's May 2024 report noted there was then no EU legal definition. It found that virtual IBANs look the same as standard IBANs to third parties, but payments to them are credited to a master account with its own IBAN. The EU Anti-Money Laundering Regulation now defines a virtual IBAN as "an identifier causing payments to be redirected to a payment account identified by an IBAN different from that identifier".
The EBA described six common use cases. Companies use virtual IBANs to automate reconciliation by assigning one to each customer or project. Payment and e-money institutions use a partner bank's virtual IBANs to offer local country codes, and the master account can double as the firm's safeguarding account. An IBAN has a two-letter country code, two check digits and up to 30 characters for the domestic account number.
The risks centre on visibility. A payer's bank cannot tell a virtual IBAN from a standard one or see where the master account sits. Under the AMLR, applying from 10 July 2027, an institution servicing a master account to which another institution's virtual IBANs redirect payments must be able to obtain the end user's identity from the issuing institution within five working days. Separately, the Sixth Anti-Money Laundering Directive, Directive (EU) 2024/1640, requires each member state's centralised register or data retrieval system for bank and payment accounts to include virtual IBANs and the accounts they redirect to.
Example
A payment firm issues 5,000 virtual IBANs, one per merchant, all linked to one master account. On Monday 3,200 inbound SEPA payments worth EUR 8,400,000 arrive. Because each lands on a merchant's own virtual IBAN, all 3,200 match to the right merchant ledger without anyone reading payment references.
Frequently asked questions
Is money paid to a virtual IBAN held in a separate account?
In the EBA's description, no: it is credited to the master account. The firm's own ledger must track each end user's share.
Can a virtual IBAN carry a different country code from its master account?
Some do. The EBA found that national authorities disagree on whether that requires a branch in the country of the code.
Where Polynopsis fits
Polynopsis reads balances from the master accounts behind virtual IBANs, through statement files and bank aggregators, into one position.
Compared with
Related terms
Sources
- Report on virtual IBANs, EBA/Rep/2024/08 (May 2024) · European Banking Authority
- Opinion on money laundering and terrorist financing risks affecting the EU's financial sector, EBA/Op/2025/10 (July 2025) · European Banking Authority
- Regulation (EU) 2024/1624 on the prevention of the use of the financial system for money laundering or terrorist financing (AMLR) · EUR-Lex, Publications Office of the European Union
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator