Virtual accounts overview

• Direct model
• Embedded model
• Fiat

This guide outlines how to use virtual accounts (VAs) to manage fiat and crypto payments through BVNK.

A virtual account is a BVNK-managed payment account that includes a virtual IBAN (vIBAN) and a wallet. It is used to send, hold, and receive funds in one place.

A wallet stores value and maintains balances in either fiat or crypto. You can connect various payment instruments, such as crypto addresses, to a wallet. If crypto is received through a channel linked to a fiat wallet, it is automatically converted and deposited as fiat. When a virtual account is linked to the wallet, you can withdraw funds through the VA. The wallet remains separate from the payment instruments, allowing flexible fund management.

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Supported virtual account types

BVNK offers several types of virtual accounts to address different payment requirements:

• Named Accounts are issued in the name of your business or your customers, enabling personalized payment routing. They are intended for domestic payments within the EEA and support SEPA payments in EUR.

• Pulled accounts are standard SWIFT accounts with vIBANs for cross-border payments. These accounts are issued under the BVNK-owned legal entity "System Payed Services Malta".

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This product is also available to businesses in the UK and in supported countries outside the EEA. GBP accounts are limited to companies incorporated in the UK, the Isle of Man, Jersey, Gibraltar, or Guernsey.

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For who is this product intended?

Virtual accounts are intended for regulated financial institutions and similar businesses that need to manage payments for themselves and their customers. BVNK streamlines this process and provides tools to efficiently manage funds between your business, your customers, and their end-customers.

The product supports two main models:

• Virtual accounts are created for direct BVNK customers, including but not limited to:

  • Any business entity: Such as fintech companies, gaming platforms, crypto businesses, and others
  • Individuals: In the embedded model, individual persons may also have virtual accounts

• Customer virtual accounts enable financial institutions and banks to create underlying virtual accounts for their own customers, such as:

  • Regulated Financial Institutions
  • Banks
  • Payment Service Providers (PSPs)
  • Crypto and Trading Platforms

Virtual Accounts

Virtual accounts allow you to create payment accounts for your business with unique identifiers, details, and vIBANs issued in your business name. These accounts function like traditional bank accounts for sending and receiving payments, but do not support credit facilities. Each vIBAN links directly to your payment account, enabling you to send and receive payments under your business name.

You can create both crypto and fiat wallets and transfer funds between them. Each crypto payment transaction generates a corresponding fiat transaction record for accounting and reconciliation.

Named virtual accounts support compliance, accounting, and tax reporting by providing clear transaction records that demonstrate you are moving your own funds. This structure allows you to separate different business operations or projects while maintaining full control over your funds.

What is a standard use case for principal virtual accounts?

You operate a crypto trading platform that receives deposits in stablecoins. Your business needs to convert these stablecoin deposits to fiat currency and withdraw funds to your external bank account for operational expenses, supplier payments, or regulatory requirements.

With a virtual account, you receive stablecoin deposits into your crypto wallet. You convert the stablecoins to euros through BVNK's trading functionality, which deposits the euros into your fiat wallet. The conversion creates both a crypto transaction record and a corresponding fiat transaction record for accounting purposes. You then withdraw the euro to your external bank account using the vIBAN associated with your virtual account.

This workflow enables you to manage crypto-to-fiat conversions while maintaining clear transaction records for compliance and accounting. The named vIBAN ensures that all withdrawals are clearly attributed to your business, supporting audit trails and tax reporting.

Customer Virtual Accounts

The customer virtual accounts product provides the infrastructure to create virtual accounts for your customers, simplifying payment tracking and management.

Financial institutions can use a Principal Wallet to store value, functioning like any other fiat wallet. With the Principal Wallet, institutions can:

• Create underlying virtual accounts for their customers
• Create wallets for their customers
• Manage funds across the entire structure

To manage transactions for your customers and their clients (whether businesses or individuals), you assign each customer a virtual account with a unique name, details, and a vIBAN. These vIBANs link to your payment account, allowing you to send and receive payments on behalf of your customers under their names.

BVNK offers virtual accounts as an optional solution. You and your customers may use them, but they are not required. Other BVNK services, such as payments, crypto trading, or treasury management, are available without setting up or managing virtual accounts.

To qualify for customer virtual accounts, your business must:

• Be a fully licensed financial services provider (e.g., UK FCA license, Canadian MSB, etc.).
• Demonstrate a robust financial crime control framework (AML, risk policies, transaction monitoring, etc.).
• Undergo compliance checks, including documentation review and interviews with the BVNK's compliance team.

What is a standard use case for customer virtual accounts?

VAs are designed for partners who need to segregate funds, simplify reconciliation, or embed financial services within their platforms.

Virtual accounts support a range of payment scenarios:

For Crypto and Trading Platforms:

You represent a crypto trading platform and want to allow your customers to deposit fiat funds for crypto trading. Your platform receives deposits from hundreds of customers daily, and you need a robust payment reconciliation mechanism to match incoming payments to the correct customer accounts.

With virtual accounts, each of your customers receives a unique named vIBAN. When a customer deposits $5,000 into their virtual account, you can immediately identify the customer who made the payment using the unique account details. The funds are deposited into your principal wallet, and you can automatically credit the customer's trading account balance. Your customers can also convert their fiat deposits to crypto, trade, and then withdraw crypto or convert back to fiat—all through their virtual account.

This setup enables seamless fund segregation, accurate reconciliation, and a smooth user experience for both fiat and crypto operations.

For Payment Service Providers and Financial Institutions:

You represent a Payment Service Provider serving multiple business customers. Your customers need to receive payments from their own clients and make payouts to suppliers, employees, or contractors. Each customer requires their own named IBAN to maintain clear payment separation and reconciliation.

You create a virtual account for each of your customers, with a unique vIBAN issued in their business name. When customer A receives a €10,000 payment from their client, the funds are automatically routed to customer A's virtual account, and you can immediately identify and reconcile the payment. Customer A can then use those funds to make payouts to their suppliers or employees, all processed through their dedicated virtual account.

This model allows you to process third-party payments on behalf of your customers while maintaining complete fund segregation, enabling accurate reconciliation, and providing your customers with professional payment infrastructure. The flow can optionally include stablecoin pre-funding for faster settlement and cross-border capabilities.

Additional use cases:

Virtual accounts also support the following scenarios:

• Neobanks: Issue named IBANs to customers for personal or business banking services
• Marketplaces: Provide each merchant with a dedicated virtual account to receive payments from buyers
• Employer of Record services: Create virtual accounts for each client company to manage payroll and contractor payments
• Treasury management: Segregate funds across business units or projects using dedicated virtual accounts

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How to get started?

Virtual accounts require approval from BVNK's compliance team. To qualify, your business must:

• Be a fully licensed financial services provider (for example, UK FCA license, Canadian MSB).
• Demonstrate a robust financial crime control framework, including AML policies, risk management, and transaction monitoring.
• Complete compliance checks, including documentation review and interviews.

Your business must be approved for the customer virtual accounts solution before you can request or create virtual accounts.

To request virtual accounts, follow these steps:

1. Contact BVNK through your Account Manager or sales contact to express interest in the VA product.

2. Submit required documentation:

   • Proof of regulatory status, for example, FCA license, MSB registration
   • AML/CTF policies and procedures
   • Risk management framework
   • Details of your business model and use case

BVNK's compliance team reviews your documents and may request additional information. Enhanced Due Diligence (EDD) may be required, especially if your business operates in a higher-risk sector, such as gambling, gaming, or trading.

After BVNK's compliance team approves your application:

1. The commercial team or support success team creates the VA product configuration, specifying which currency virtual accounts you need and other parameters.
2. The account activation team maps your parameters to the appropriate banking partner.
3. A wallet is created in the admin panel, mapped to the banking partner.
4. Once the wallet is created, a virtual account (EUR VA or SWIFT account) is attached to it.

Once your business is enabled for VAs, you can create VAs for your underlying customers. To do so:

• Collect KYC information for your customer (the end user who will receive the VA).
• Screen the customer according to BVNK's requirements, including manual screening and risk checks.

After completing these steps, you can proceed to the configuration phase.

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Ready to start? After completing the setup process with BVNK, select the model that fits your business needs and proceed with integration:

• Virtual Account for your business
• Virtual Accounts for your customers