A virtual bank is a bank that operates without a physical presence. You can set up a virtual bank account using the web or an app without having to visit a bank. In this article, we will list some of the leading providers of a virtual bank account with debit card.
Are Virtual Banks Secure?
Similar to brick-and-mortar bank, virtual banks are regulated by financial regulatory authorities in countries they operate in and customers’ deposits are insured. Additionally, virtual banks have to meet Payment Card Industry (PCI) compliance requirements to ensure that clients’ data is secured. Virtual banks that are not fully licensed banks operate in partnership with traditional banks to protect account holders’ funds.
Virtual Bank Account USA
For US Residents
- No Maintenance. Americans get a real bank account without balance maintenance. In most instances, account balance maintenance is optional and if you choose to maintain, your fees can be waived off. There is no need to worry if your account doesn’t have a balance, it works just fine.
- Low Fees. For B2B virtual bank accounts, you pay extremely low fees compared to real bank accounts or no fees at all.
- No Credit Checks. Virtual bank accounts will provide you with a prepaid card that allows you to use the money in your bank account.
For Non-US Residents
- US bank account. If you are not living in the USA, then you need a US virtual bank account more. Most online programs such as affiliate marketing pay only into an American bank account or charge extra cash to pay into an international account. Web entrepreneurs don’t need to go to the US to get an American virtual bank account, you can apply online.
- Prepaid cards and debit card. You can apply for a virtual bank account with a debit card. There are also many virtual banking services that offer virtual prepaid cards. These prepaid cards can draw funds from Google Adsense, Amazon Payments or PayPal. The card is usually a Visa/MasterCard.
How to Make it Work With Virtual Bank Account
Now, more than ever, it is possible to settle debts without necessarily visiting the bank. As an alternative, customers visit the banking website and complete their financial transactions online, whether on their mobile phones or computers. As such, virtual banking has been coined as Internet banking, mobile banking or online banking.
How to Deposit Money in Virtual Bank Accounts
The question about how to deposit cash in your virtual account is easy to answer. The traditional way of doing things would be asking your employer to deposit your cheque directly to your account. Well, did you know that you could also do deposits your check with your virtual bank account? All you have to do is to deposit it using photo check deposit by taking photos of the front and back of the check with your smartphone. Depending on the bank, you can use their website or app for this. For some, however, you will have to mail the check. Other means of depositing money in your virtual bank account include a bank transfer and direct deposit.
How to Withdraw Money from Virtual Bank Accounts
You can withdraw funds the same way you would with traditional banks. Like any other bank, virtual banks also issue debit cards. Therefore, you can withdraw your funds using ATMs. Considering virtual banks do not possess their own ATMs, you will be surprised that the transaction fees are the same, if not lower, than those of ATM card owners of the same bank. This is because most virtual banks do not charge ATM withdrawal fees. Other methods of withdrawing money include wire transfer, check, bill pay feature, and cash back at a store.
Account Opening
All it takes for you to get your virtual bank account today is simply fill out an online application. Most virtual banks would not require you to make deposits immediately but would need to confirm your identity in the long run. As such, they will allow you to make transactions but to a certain limit amount when they ask you to send them your identity card or driving license. However, they do not limit your account or freeze any of your transactions before they request for proof of identity.
Conclusively, virtual banking is easy to use, efficient and time-saving. You should be able to now understand that virtual banks do not pay for brick and mortar locations, and that translates to cheaper transaction fees as opposed to traditional banks. In return, they offer higher interest rates on your savings account and give B2Bs a higher level of convenience.
Virtual Bank Account Review
Transferwise Review
I came by an opportunity to expand my business to overseas markets with a branch in India. I regularly transfer money over there from Germany and quickly I realised that one of the major banks was either thinking I was stupid or naive.
They were charging – between conversion fees and what now I know is called the spread – literally 10% to transfer my money. So, imagine: Germany’s government charging pretty high taxes, and now I will have to pay 10% to a bank just to make sure my people got paid.
So, this is why I love Transferwise Borderless bank account. I cut down the finance charges from 10% to 1%. That is right! I save 10 thousand euros a year thanks to Transferwise. I highly recommend them.
One additional perk is speed too. Because of the way they have structured their deal with international banks, my money got to India one to 2 weeks faster.
N26 Review
I am a foreigner living in Berlin and of course I needed a bank account. The linguistic and cultural barriers are hard to deal with when it comes to opening a bank account because the paperwork requirements are so different and the online information sources are lacking precision.
So, I was recommended a startup bank called N26 and could not be happier. Now not a startup anymore since it has 5 million customers, including 250,000 in the US, I am glad to call myself a client of N26. They are fast, easy to use and most importantly, you get a bank account for free in under 10 minutes right here.
With the UK now having left the European Union, N26 will in due course be unable to operate in the UK with its European banking license. As a result, N26 will be leaving the UK and closing all accounts in the coming months.
Payoneer Review
Payoneer is a US virtual bank account that has been on the market for over a decade. I had never heard of them until recently of course because this is how these things work in a world with hundreds of alternatives for everything. It is amazing to me actually that in order to get a money transfer done, or an international bank account you can be so overwhelmed and underwhelmed at the same time.
When I found Payoneer, I thought they were reasonable and effective at their craft. I have so far no complaints and I hope to stick with them for the long term.
Why? I think their offer is quite well adapted to people who make money online like myself. For example, Payoneer allow Amazon sellers to receive funds from Amazon Marketplaces even if you don’t live in those countries. You can open an account here.
Virtual Bank Accounts for Non-US Residents
One of most common virtual bank account for non-US residents providers is Payoneer. As we outlined above, Payoneer is one of the most popular virtual account providers online and is available globally. This account can be used for personal and business purposes but its $30 annual fee is an impediment. Read our article for a thorough review of Payoneer virtual bank account for US non-residents.
Conclusion
The above virtual banks and others will solve most of the problems people have with traditional banks such as exorbitant fees and paperwork. Virtual banks can also help online entrepreneurs have been facing receiving bank account problem when dealing with American or European companies.
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