The Central banks of Malta, Cyprus, Gibraltar, Lithuania and other jurisdictions are encouraging business people to set up new Fintech companies and begin the long Electronic Money Institution license application process (more about the EMI license application process in part two of this post).
In the following chart, you can see the total number of EU e-money and payment institutions for the years 2001 to 2014. The information was supplied by the European Central Bank.
In an effort to boost economic profits; encourage competitiveness and promote the continued adaptation as we move into the digital age the EU has instituted a number of e-commerce innovations.
What are the main features of e-banking?
Electronic banking services are usually available 24/7 and can be accessed from anywhere in the world as long as you have a device and an Internet connection. Other features of e-banking include viewing your account; viewing images of paid cheques; ordering checkbooks; fund transfers; paying bills; applying for a loan or credit card and some electronic banking services offer further services. Your online banking account can have special features like uploading bulk payments for employees or suppliers. You can also download and print your bank statements. Electronic banking usually has a customer support service in the form of a live chat, phone number or e-mail address. You can also get financial alerts, view Forex rates, set up stop-orders for recurring payments and manage your bank account access and authorization.
What are the different types of e-banking services?
Electronic banking comes in various forms. Internet banking can be done online via your personal computer, laptop or tablet. ATMs also fall into the category of electronic banking as they use a computerized telecommunications system to allow customers to access their bank accounts, withdraw funds and deposit checks without the need for human intervention. Telebanking is a form of e-banking. Customers dial a telebanking number and have access to their account by following the instructions of a user-friendly menu or Interactive Voice Response System. Another form of e-banking is the Smart Card that holds a microprocessor and can “communicate” with a card reader to make financial transactions. For example a reloadable transport card. Even debit cards are a form of e-banking; they function as cash but no cash changes hands at the point of purchase. E-cheques are an electronic version of traditional paper cheques.
The Advantages of E-Money Business account
In essence, e-money, or electronic money, is a currency that is available only in digital form, and it is transferred electronically, unlike physical money, such as banknotes or coins. Customarily, e-money or e-currency transactions are conducted via the Internet or with the use of smart cards – that are associated with a bank account. Following the stabilization of e-money as a prominent payment instrument, mobiles are becoming a central apparatus for administering e-money transactions. In what follows we will provide a comprehensive review of e-money, highlighting its most conspicuous and more significant advantages while openly discussing its disadvantages.
Cost-effectiveness – E-money transactions are carried digitally, through an online payment gateway that secures the identity and payment information of the person whose funds are transferred. When the electronic money company has accounts at the bank – to which or from which money is transferred – the digital transfer of funds is instantaneous, and therefore also highly economical.
Accessibility – E-money can be used globally, and, in fact, it is a leading form of currency to be used in international transactions; it saves the trouble involved in currency exchange; it is highly reliable and has low transaction fees. Sending a cheque would take several days to clear, yet with an online money transaction, funds are transferred directly – even after your bank’s opening hours or during holidays. The growing popularity of e-money, nowadays, has led to digital transformation in banking, motivating banks to compete with one another in order to facilitate account holders with improved deals and reduced transfer costs.
Protection from harm – Carrying a large sum of money always involves the risk of theft or loss. E-money, however, eliminates such possibility, and it is, therefore, a more secure and reliable payment method. Each transaction will necessitate the use of a personal identification number (PIN), as a security measure prior to the completion of any transaction; some additional, yet simple, precautions will ensure the safekeeping of your online account, ascertaining that your card is not misused.
Recording transactions – Each electronic payment transaction has online documentation within the bank’s and the user’s records. A transaction’s record entails all the essential information: names of the parties involved in the transaction along with documentation of the date, time and whereabouts of the transaction. These records are available to users at any given moment.
Restriction – As a safety measure, banks restrict the number of daily transactions that account holders are permitted to conduct, limit the amount of output and specify an upper limit to the account. While most people may comprehend the logic behind such limitations, others might find it too restricting and inconvenient.
Risk of being hacked – Unavoidably, with any online transaction, your personal information, along with the details of your account and credit card, is exposed over the Internet. Whereas chances of your account being hacked or your identity stolen are smaller when following security rules, these risks do exist. Hackers might employ your stolen identity for purposes of any fraudulent activity or transfer funds from your account, potentially causing severe losses.
False identity – It is currently impossible to verify the identity of a person who enters personally identifiable information, online. As opposed to physical transactions – in which the identity of the one making the transaction can be verified by a photograph, a signature or an official document – digital transactions cannot offer such certainty. Electronic cash transactions rely on cryptographic systems: transferred information is encoded by numeric keys as the details of a transaction “travel” across the web. While such systems are less prone to forgery, the numeric keys are somewhat vulnerable and can be hacked.
Different payment systems – Difficulties might arise when transferring money between different electronic payment methods since, often, they are not synchronized. In facing such a predicament, the use of e-currency exchange services is required; while it provides a convenient solution, it also prolongs the amount of time necessary for the completion of the transaction.
Whereas the disadvantages of using e-money should be taken seriously and evoke thorough consideration, the advantages of electronic money undoubtedly supersede any fault or temporary inconvenience.
The Advantageous Position of Best Virtual Bank Accounts and E-money Business Accounts
There are numerous and significant advantages to virtual bank accounts or e-money accounts over a standard bank account. First, virtual banks enjoy the privileges associated with the characteristics of a virtual domain, i.e. occupying no actual space. Consequently, virtual banks are able to save in labor and overhead costs, therefore allowing enabling them to offer low-cost banking services, higher interest rates and lower service fees. Second, a virtual account allows you to conduct your business at the time and place convenient to you. Thirdly, a virtual bank account enables you to conduct your business more efficiently and conveniently while managing your account with a greater sense of control: account holders can cluster together documentation of ingoing and outgoing transactions. Virtual bank accounts or e-money accounts, therefore, provide you with the following:
- Fast transactions.
- Low administrative costs. Notably, since there are no “free meals” when conducting businesses, if offered a “best free virtual account,” make sure to enquire as to any hidden charges, fees and costs.
- Simple flow monitoring.
- Improved cash flow.
- Improved account reconciliation process.
- Ability to change your clients’/ suppliers’ assigned account numbers at any given time.
Opening a Virtual Bank Account – The process of opening a virtual bank account could not be more straightforward and rapid; normally, it is as simple as filling out an online document or making a simple deposit. As a first step, you ought to allocate your account with a clear purpose, for example, designating a legal entity or even a business unit. This procedure is carried out by assigning each of your virtual accounts with a unique identification number, thus differentiating it from other existing accounts, within the master account. When you have a European virtual bank account that contains an IBAN number, it is possible to amalgamate any other accounts, so as to contain them within a central account.
Best virtual bank account – There is an abundance of electronic payment methods that are employed within the global financial system, nowadays. Each of these methods, for obvious reasons, has its advantages and disadvantages. In choosing your desirable digital payment platform, it is advisable to take into consideration your intended audience. Who are your clients? Will they find the functions, provided by the electronic payment methods of your choosing, comprehensible and accessible when purchasing either goods or services online? Possibly, the most accommodating solution would be to offer your clients several payment methods and alternatives, in order to offer them the most comprehensive assistance.
How to open an IBAN Account?
Opening an IBAN Account – Used primarily in the European Union, a virtual International Bank Account Number, also known as an IBAN account, internationally reroutes funds from a virtual IBAN account to a physical master IBAN account. IBAN automatically processes transactions; identifies a customer’s bank account; guarantees the authenticity of data; and, contributes to standardization. While different countries have somewhat different application processes and requirements for opening an IBAN account, you will most definitely need your passport, proof of address, and, possibly, proof of employment. Once all personal documentation is provided, the required documentation for the company representation rights will have to be submitted. Whether you choose to open an IBAN account by opening a traditional bank account, in the country of incorporation, or you wish to do so online, as long as you have the necessary documentation, the application process should be easygoing and most efficient.
Best Business Virtual Account with IBAN
In general, it is safe to say that virtual banking will be one of the most prominent characteristics of future banking. Opening a European virtual bank account with an IBAN number is highly profitable and particularly easy. The application process is conducted online, saving the time spent waiting in lines at the bank. In addition, having an IBAN primarily but not exclusively benefits business owners since it assists in managing your transactions and funds: With a virtual IBAN account, your funds are rerouted from other accounts you might own into one physical ‘Master Account,’ serving as an efficient and economic method for supervising and centralizing your incomes and expenses. Furthermore, not only does an IBAN processes all transactions and guarantees the authenticity of data but, rather, because it identifies your customers’ bank accounts, it offers full transparency and reduces Anti Money Laundering risks. The best virtual IBAN account can be accessed at any time and from anywhere. It allows you to pay and receive payments without delay; provide multi-currency services; charge no monthly or yearly costs and no set-up fees
What are the key benefits of Virtual Bank Accounts and Virtual IBANS?
Reduce costs + Increased efficiency
Virtual bank accounts remove the costly fees of opening and managing many physical accounts and remove the need of paying for cash management products. Virtual bank accounts also save businesses time by greatly reducing the amount of manual work associated with reconciliation processes.
Allocated for any purpose
Virtual accounts can be allocated for a range of different purposes. Each account has its own unique number making it easy to separate and identify them in the master account.
Centralize incoming/outgoing payments
Virtual bank accounts remove the need for a complex network of accounts, allowing transparency of all incoming and outgoing transactions. This creates a better environment for account management and helps businesses control their finances with increased efficiency
Simplifies multi-currency payments
Virtual Bank Accounts with IBANs make payments across currencies and jurisdictions easier. It removes the need for multiple banking relationships and their related fees
Tailor your virtual account
Every business has its unique needs and virtual accounts can be created to suit a company’s individual requirements.