Moving money into MENA has traditionally been slow, opaque and expensive. Cross border payments often involve multiple intermediaries, high fees and long settlement times. For international companies, this creates friction when collecting and sending local
payments at scale.
Virtual IBANs (VIBANs) offer a modern way to navigate this complexity. By giving businesses local-like payment capabilities without the need to open physical bank accounts in the region, VIBANs can help close the gap between global demand and local financial
infrastructure.
What is a VIBAN?
An IBAN is a unique code (up to 34 characters) that identifies an individual bank account both locally and internationally in a globally accepted standard. From the IBAN itself you can determine the issuing country, the bank, and the routing and account
numbers required to settle a payment.
Each country has its own account format, but the IBAN normalises these into one simple structure that works
across most payment systems. For more on how IBANs compare with SWIFT routing, see this primer from Western Union.
A virtual IBAN works in the same way but it is linked to a pooled account rather than a physical bank account. It acts as an identifier that can have any name attached to it, regardless of the pooled account details. This allows transactions to look and
feel like they are made directly from the sender.
Why VIBANs matter for cross border payments
VIBANs route transactions in the correct name, increasing bank acceptance rates and improving reconciliation. Incoming and outgoing funds are segregated by customer on unique addresses, making every transaction easy to track. They allow companies to offer
a single multi-currency experience without revealing the multiple pooled accounts that sit underneath.
For example, a PSP can issue VIBANs to merchants to collect local AED payments on their behalf. A payroll platform can use VIBANs to pay contractors in the UAE without opening a local account. A trading platform can reconcile high volumes of customer deposits
with ease.
Opening individual physical accounts for each end customer is often impossible when they are not based in the country where payments are made. VIBANs remove this barrier and give companies a scalable way to operate across borders.
The MENA context
IBANs are standard in Europe and the UK but not globally. North America, Australia, New Zealand and China rely on SWIFT codes and routing numbers. In the UAE, the Central Bank
mandated IBAN usage for local banks in 2011.
Countries like Kuwait, Lebanon, Saudi Arabia, Tunisia and Turkey have since implemented IBAN formats, and
Economy Middle East provides a useful overview of how IBAN works in the region.
Local virtual IBAN solutions, however, remain rare. MENA is now seeing a rise in demand for payment innovation. The UAE’s digital payment market is projected to reach 9 billion USD by 2028.
Local banks have not been required to adopt these technologies, as local companies only needed settlement accounts to receive payments. Global interest in the region has accelerated faster than local supply.
This growing gap between international demand and local capabilities is creating clear opportunities for modern clearing solutions that support VIBANs at scale.
Looking ahead
VIBANs are not new, but their application in MENA is still emerging. As more international companies look to expand into the region, demand for reliable local clearing infrastructure is growing fast.
This is the space Fuse focuses on. By building modern clearing infrastructure in MENA, Fuse enables financial institutions and platforms to offer services like VIBANs to their customers without needing to build local capabilities from scratch.
The combination of VIBANs and local clearing rails has the potential to make cross border payments into MENA faster, more transparent and more efficient than ever before.
