Virtual Accounts: A Payment Management Alternative for Your eCommerce Business

Amirul Imtiaz bin Shah Rizal
Feb 8, 2023
3 minutes of read


Virtual Accounts: A Payment Management Alternative for Your eCommerce Business

Starting up any business is hard. There are a great number of things that you need to consider before you even take that first step into becoming a merchant. Now that you have started your business, comes the difficult prospect of managing it. This is compounded further when your business is centred around international eCommerce. On top of everything else that you need to juggle around, you also need to consider the payment collection process, knowing how much to hold in any given currency you deal in, and when to pay out.

In between all of this is the process in which the international payment or cross-border payment is made. Since virtual accounts fall within this category, let us have a quick look at how international payments are typically handled¹.

Steps in International Payments

International payments, or cross-border payments, are transactions that occur between two entities–usually a buyer and merchant–across different countries and involve more than just banks². Regardless of the payment method or gateway used, the fundamental process remains the same:

  • When a buyer makes a payment, that payment information is communicated to their bank or financial institution of choice.
  • Along the way, a bank or financial institution may act as an intermediary institution to facilitate the transfer of funds and information between the buyer’s bank and the seller’s bank.
  • The funds and payment information reaches the seller’s bank.
  • Each step of the way is recorded and communicated through the payment rail chosen.

How Merchants Save Costs in Making Payments: Registering to a Local Business Entity

A common method that most merchants use to save costs in making payments is by registering an account to a local business entity in the target market. The reason for this is to largely circumvent the various costs associated with cross-border transactions, including FX costs. The logic behind registering to a local business entity is so that the merchant can hold money in a different currency, and make it more convenient for them to conduct payouts via vendors and sub-merchants.

However, while having a local business entity hold your funds in a different currency can seem appealing, it is not without its hurdles which include, but are not limited to, red tape, being subject to local taxes, and overall time consumption.

These downsides are why most eCommerce merchants tend to prefer using virtual accounts instead.

What is a Virtual Account?

A virtual account functions similarly to your average standard bank account¹. They have their own unique account numbers, help users maintain their balances, and streamline incoming and outgoing transactions. The key difference between a virtual account and a traditional bank account is that the former cannot actually hold money¹. Instead, it receives the payment, collects necessary information about the sender, and passes it on to a primary account.

A helpful analogy would be the difference between your primary email address and your email sub-aliases¹. While both share the same inbox, you can create multiple email sub-aliases to differentiate your activity. A business making multiple virtual accounts for different clientele, transactions, or any other business reason works the same way.

How a Virtual Account Can Help Your eCommerce Business Collect Payments

When your eCommerce business caters to a variety of clients from all over the world, it is going to be a challenge to handle those various streams of cash into your business bank account along with attributing each cash flow to an individual user or entity. A virtual account, due to its aforementioned attributes and function, can save you a lot of time compared to registering with a local business entity. For starters, you can skip the need for business registration entirely since your virtual accounts are all linked to your primary business account whilst simultaneously allowing you to distinguish between each transaction, thereby saving much needed time and costs. This is especially useful if it is also tied to a payment gateway like Tazapay, since it has access to markets in over 173 countries and more than 80 of them are localised.

Of course, there are some costs that cannot be avoided, like payment method costs and FX costs, but at least virtual accounts go a long way towards shaving those hours and saving your money.

Now that you are more familiar with virtual accounts, why not give it some thought today? While you’re at it, why not also look for a suitable international payment provider like Tazapay to make your business endeavours much simpler? With just one account, you can access more than 173 markets the world over and also enjoy competitive FX rates.


  1. What are virtual bank accounts? - Modern Treasury
  2. A Quick Introduction to International Payments - Currency Exchange International, Corp. (
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Virtual Accounts: A Payment Management Alternative for Your eCommerce Business
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Virtual Accounts: A Payment Management Alternative for Your eCommerce Business

Feb 8, 2023
3 min of read

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