What is a virtual bank account, and how does it work?

If your business works with clients abroad or sells on international marketplaces, you have probably run into the same problem: they want to pay you by local bank transfer, and your business does not have a bank account in their country. A virtual bank account is one of the simplest answers to that problem.

But the name can be confusing. Is a virtual account a real account? Who actually holds the money? And how is it different from just giving your client your company’s local bank details?

This guide explains what a virtual bank account is, how named USD, EUR and GBP business accounts work with Vav, how they compare with other ways of getting paid, and what to check before you open one.

How a virtual bank account works

The idea is simple. Instead of asking your client to send an international transfer to your company’s bank at home, you give them local details in their own currency. To them, paying you looks just like paying a supplier down the road.

Named accounts in your business’s name

With Vav, accounts are opened in your business’s name by a licensed partner. That matters: when your client or a marketplace sends money, the account name matches your company’s, which helps payments go through smoothly and keeps your records clear.

Vav itself is a technology platform. It is not a bank and does not hold customer money. The accounts are provided by our licensed partners, and Vav gives you the app to manage them.

Which currencies are available

Vav offers named accounts in three currencies:

• $USD
• €EUR
• £GBP

Each one uses the payment systems that are standard in its region:

• USD accounts can receive via ACH, Fedwire and SWIFT.
• EUR accounts can receive via SEPA.
• GBP accounts can receive via Faster Payments.

What you can do with the money

Once a payment lands in your account, you decide what happens next.

Hold it

You can simply keep the balance in the currency you received. This is useful if your business expects to pay suppliers or spend in that currency later.

Cash out locally

You can cash out to PKR, sent to bank accounts, Raast and mobile wallets in Pakistan, usually within minutes. USD payouts are also available.

• RsPKR

Note that PKR is a cash-out currency, not an account currency. Any fees are shown in the Vav app before you confirm.

How it compares with other options

There is more than one way to get paid from abroad. Here is how a virtual account compares, in broad terms, with the alternatives.

Many businesses use more than one. For example, an online seller might receive marketplace payouts into a USD account and bank transfers from a wholesale buyer into a EUR account. Our guide on how businesses in Pakistan get paid by overseas clients compares the options.

Who a virtual account is for

Virtual accounts tend to suit businesses that are paid regularly from other countries.

Exporters, agencies and software companies

If your business invoices clients in the US, Europe or the UK, a named account in its own name gives them a familiar way to pay you, like any other supplier. Our guide on how businesses in Pakistan get paid by overseas clients covers this in more detail.

Online sellers and marketplace businesses

Marketplaces such as Amazon, Shopify and Etsy pay out by bank transfer to the account details you provide, where they support that currency and country. A business account with Vav lets you receive those payouts under your company’s name. Learn more on our business page.

What to check before you open one

A little preparation makes opening an account straightforward.

• Verification. Your business will need to complete KYB, and directors and authorised users verify their identity. Accounts are not available without verification. Our explainer on KYC and KYB explains what to expect.
• Availability. Vav is launching in Pakistan first, including US-registered LLCs owned by founders in Pakistan, followed by the UAE, Saudi Arabia, Malaysia and Singapore. Availability varies by country, account type and partner.
• Your payers. Confirm that your clients or platforms can pay to the currency and rails you plan to use.
• Fees. Any fees are shown in the Vav app before you confirm.

To see how named accounts work in practice, visit our virtual accounts page.

This article is for general information only and is not financial, legal or tax advice. Vav is not a bank. Vav services are provided together with third-party providers; availability, eligibility, supported currencies, payment rails and features vary by country, account type and provider, and all accounts are subject to verification. Currency conversion carries risk — read our Risk Disclosure. See our Terms of Service and FAQ for more.

Vav Editorial Team

Editorial team at Vav

The Vav Editorial Team writes plain-language guides to global accounts and virtual cards for businesses that get paid and pay suppliers across borders. Every guide is checked against how the Vav app actually works, and we update articles when products change.

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