What are virtual accounts?

What are virtual accounts?

A virtual account is a unique account number assigned within a main settlement account. Think of it like an email address; while all the emails land in the same inbox, each unique address helps identify exactly where the message came from.

If your business receives payments from multiple customers across different products, services or platforms, you and your admin team have probably experienced the pain of manually reconciling transactions and trying to figure out who paid for what and which funds should be matched to which invoice. 

With a constant flow of transactions, it’s hard to keep track of references and maintain accurate records. There is also the risk of a customer entering incorrect account details, resulting in money being transferred to the wrong account. 

Virtual accounts provide the solution to these all-too-common problems.

In payments terms, this means your business can assign every customer, transaction or invoice a distinct set of payment details. As money comes in, it’s automatically attributed to the correct sender and purpose. 

No more guesswork. No more follow-ups. No frustrating spreadsheet workarounds.

How Virtual Accounts Work for Businesses

Virtual accounts are similar to standard bank accounts. They have unique account numbers, support incoming and outgoing payments and are compatible with real-time payment options like PayID and Osko.

However, unlike traditional accounts, virtual accounts don’t hold balances. They act as digital tags for transactions, collecting sender information and passing it through to a primary account where the funds are actually held.

Using virtual accounts is a smart way for businesses to segment payments without needing multiple bank accounts. For example, a business might use one virtual account per:

• Customer
  
• Invoice
  
• Brand or entity
  
• Business unit or revenue stream

This gives visibility over where payments are coming from, while keeping reconciliation fully automated and up to date.

Businesses that have integrated Monoova have virtual account capabilities we refer to as ‘Automatcher’. This is the unique payment destination clients pay their deposits into (either using BSB and account number or PayID). With Automatcher, payments are instantly identified and easy to reconcile because they are matched to a single user. 

Benefits of Virtual Accounts for Businesses

For any organisation with high transaction volumes from multiple payers, managing, reviewing and reconciling payments is often complex, time-consuming and resource-intensive. Finance teams are often left to:

• Review payment references manually
  
• Match transactions by hand
  
• Chase missing or incorrect payments (according to feedback shared by Monoova clients in 2022, up to 30% of payments that come in are incorrect or don’t have the right references)
  
• Update records across multiple systems
  
  

Using virtual accounts eliminates these friction points by automating the matching process and linking payments directly to their source via unique account numbers or PayIDs. 

With fewer errors and real-time visibility, finance teams save hours of admin every month and reduce the risk of misallocated funds.

Virtual accounts make life easier through:

• Real-time reconciliation: Incoming payments are matched instantly to the correct account or invoice
  
• Greater visibility: Each transaction is traceable, with full source data
  
• Better cashflow management: See accurate balances and payment flows in real time
  
• Lower risk: Monoova’s Automatcher capabilities reduce errors and manual intervention. Meanwhile, built-in security features such as end-to-end encryption, and PCI-DSS and SOC 2 Type II compliance
  
• Webhooks for automation: Receive instant notifications of inbound direct debits, direct credits, dishonours, BPAY and NPP payments
  
• Advanced reporting: Access detailed transaction histories and performance insights to support forecasting, auditing and financial planning

Pairing Virtual Accounts with PayID for Faster Payments

Virtual accounts become even more powerful when paired with PayID. Instead of requiring customers to enter long account numbers and BSBs, you can share personalised, easy-to-remember PayIDs, like john.doe@yourbusiness.com.au, that link directly to your virtual account number.

This makes payments faster, safer and more user-friendly. Better still, each PayID can be branded with your business name, building trust at the point of payment.

Businesses that use PayID with virtual accounts benefit from:

• Real-time payments and instant settlement
  
• Branded payment experiences
  
• Lower transaction costs than cards
  
• Reduced reconciliation errors
  
• Real-time alerts for failed or incorrect transactions
  
  

You can assign a different PayID for every customer, invoice or product, and integrate the entire system with your ledger or reporting tools via Monoova’s API.

Use Cases: How Businesses Use Virtual Accounts andPayID

Monoova clients use virtual accounts and PayID to:

• Streamline invoicing: Give every invoice unique payment details for instant matching
  
• Fund customer accounts: Let users top up digital wallets or investment balances in seconds
  
• Manage compliance: Control who can send or receive funds, with full audit trails
  
• Pay suppliers: Cut processing times and paperwork with secure, traceable payouts
  
• Improve reporting capabilities: Gain granular, real-time visibility into transactions with clearer data presentation

Example: Real Estate Payment Automation

A typical scenario of virtual accounts + PayID could involve a real estate agency tenant. 

For example, Jeffrey has just signed a lease with a property management agency. As part of the lease agreement, he needs to transfer his bond and initial rent payments from his bank account to the agency.

When Jeffrey is onboarded through the agency’s property management platform, the platform automatically notifies Monoova of a new user. Monoova then creates a virtual account (Automatcher), for Jeffrey. This account generates unique payment details specifically linked to him, and sends him PayID details in the form of an email address, rather than an account number and BSB.

Now, when Jeffrey pays his rent, Monoova instantly recognises who the money has come from and matches the deposit to his virtual account credentials. Within seconds, the agency receives confirmation that Jeffrey has paid, and the money is ‘assigned’ to the right account/property.

There is no need for manual reconciliation. This means the agency’s admin team spends less time cross-checking bank statements and more time delivering service to landlords and tenants. Explore how real estate agents can benefit from streamlined payments.

Why Choose Monoova for Virtual Accounts?

Rising costs and staffing shortages mean businesses don’t have time for manual workarounds or time lost tracking missed or incorrect payments. With Monoova’s virtual accounts Automatcher, you can deliver faster, more secure and more efficient transactions for both customers and your internal teams.

Whether you're managing a fintech platform, a wealth fund, a retail marketplace, subscription service or anything in between, Monoova helps you move money smarter.

Get Started with Virtual Accounts and PayID

Ready to simplify your payments? Switch to Monoova’s virtual accounts and PayID for instant reconciliation, fewer errors, and faster cash flow. Book a free demo or speak to our team today

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Frequrently Asked Questions

Q1: What is a virtual account?

A virtual account is a unique payment identifier assigned to a customer, transaction, or invoice. It helps businesses reconcile payments automatically without multiple bank accounts.

Q2: How do virtual accounts work with PayID?

PayID links an easy-to-remember email or phone number to a virtual account, making payments faster, more secure, and less error-prone.

Q3: Why should businesses use virtual accounts?

They save time, reduce payment errors, improve cash flow, and provide real-time visibility over incoming payments.

Q4: Does Monoova offer virtual accounts?

Yes. Monoova’s Automatcher provides virtual accounts with instant reconciliation, PayID integration, and advanced reporting.

Q5: Are virtual accounts safe?

Yes. Monoova’s virtual accounts use encryption, PCI-DSS and SOC 2 Type II compliance to keep transactions secure.

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