In the fast paced world of fintech, understanding the different financial products available can be crucial for businesses looking to streamline their operations and improve their financial processes. Three tools that are often asked about are Virtual Accounts, Rapyd Wallets, and bank accounts. While they all serve a similar purpose, there are some key differences between them. By understanding these differences, businesses can make informed decisions about which financial tools are right for them.
What are Virtual Accounts?
Virtual Accounts (VA) are digital accounts that are used to collect, hold, and move funds. They are built on top of Rapyd Wallets and are designed to act as local bank account numbers with a unique set of numbers that are the digital address. Virtual accounts are often used by any business to receive payments from their customers locally in the country where the VA is issued.
Virtual accounts are especially useful for businesses that need to manage multiple accounts in different countries. They allow businesses to create a virtual account for each country in which they operate, making it easier to manage payments and transfers across borders.
You can create a Virtual Account with the Rapyd API. Simulating a Virtual Account payment is fun as you can add funds to load your account.
We’ll look at the different types of accounts, and requests, and responses using the Rapyd API.
Issue a Virtual Account
Request
POST https://sandboxapi.rapyd.net/v1/issuing/bankaccounts
{
"currency": "EUR",
"country": "DK",
"description": "Issue virtual account number to wallet",
"ewallet": "ewallet_2b15c5c8ffe245adb15dbb9aa1125659",
"merchant_reference_id": "5rtfgk8970dfbmaes",
"metadata": {
"merchant_defined": true
}
}
Response
{
"status": {
"error_code": "",
"status": "SUCCESS",
"message": "",
"response_code": "",
"operation_id": "f9fe8039-4d8d-4980-97b3-266523010a13"
},
"data": {
"id": "issuing_343968483c4e24d75776860cda0e4eb6",
"merchant_reference_id": "5rtfgk8970dfbmaes",
"ewallet": "ewallet_80c390f0e8b0d9f10966422c24f653a6",
"bank_account": {
"beneficiary_name": "CashDash UK Limited",
"address": "Northwest House, 119 Marylebone Road NW1 5PU",
"country_iso": "DK",
"iban": "DK4289000092780662",
"bic": "SXPYDKKK"
},
"metadata": {
"merchant_defined": true
},
"status": "ACT",
"description": "Issue test bank account",
"funding_instructions": null,
"currency": "EUR",
"transactions": []
}
}
Simulate Bank Transfer to Virtual Account
Request
POST https://sandboxapi.rapyd.net/v1/issuing/bankaccounts/bankaccounttransfertobankaccount
{
"issued_bank_account": "issuing_343968483c4e24d75776860cda0e4eb6",
"amount": "150000",
"currency": "EUR"
}
Response
{
"status": {
"error_code": "",
"status": "SUCCESS",
"message": "",
"response_code": "",
"operation_id": "12c365a7-1dab-4dca-9799-df9466ff7772"
},
"data": {
"id": "issuing_343968483c4e24d75776860cda0e4eb6",
"merchant_reference_id": "5rtfgk8970dfbmaes",
"ewallet": "ewallet_2b15c5c8ffe245adb15dbb9aa1125659",
"bank_account": {
"beneficiary_name": "CashDash UK Limited",
"address": "Northwest House, 119 Marylebone Road NW1 5PU",
"country_iso": "DK",
"iban": "DK4289000092780662",
"bic": "SXPYDKKK"
},
"metadata": {
"merchant_defined": true
},
"status": "ACT",
"description": "Issue test bank account",
"funding_instructions": null,
"currency": "EUR",
"transactions": [
{
"id": "isutran_379b40286146f93531c71c8a51a02701",
"amount": 150000,
"currency": "EUR",
"created_at": 1682034085
}
]
}
}
What are Rapyd Wallets?
Rapyd Wallets are digital wallets that hold funds in the Rapyd ecosystem. They are issued to a contact and act as a powerful financial hub for your business. Rapyd Wallets make it possible for businesses to accept payments, fund payouts, and issue cards all from a single account. When combined with other Rapyd API calls, Rapyd Wallets can help businesses streamline their financial processes, and improve the bottom line to make money and move it to where it needs to be.
Funds can be moved using Rapyd’s payment or payout methods and are transferred to your bank account, or other Virtual Accounts. You automatically have a Client Wallet as you create your account in the Client Portal. You can create any personal or business wallet for your customers to hold funds.
Rapyd Wallet
Request
POST https://sandboxapi.rapyd.net/v1/user
{
"first_name": "Samson",
"last_name": "Smith",
"email": "kyle+test124@rapyd.net",
"ewallet_reference_id": "Samson-Test-04202023",
"metadata": {
"merchant_defined": true
},
"type": "person",
"contact": {
"phone_number": "+14155551311",
"email": "kyle+test123@rapyd.net",
"first_name": "Samson",
"last_name": "Smith",
"mothers_name": "Jane Smith",
"contact_type": "personal",
"address": {
"name": "Samson Smith",
"line_1": "123 Main Street",
"line_2": "",
"line_3": "",
"city": "Anytown",
"state": "NY",
"country": "US",
"zip": "12345",
"phone_number": "+14155551111",
"metadata": {},
"canton": "",
"district": ""
},
"identification_type": "PA",
"identification_number": "1234567890",
"date_of_birth": "11/22/2000",
"country": "US",
"nationality": "US",
"metadata": {
"merchant_defined": true
}
}
}
Response
{
"status": {
"error_code": "",
"status": "SUCCESS",
"message": "",
"response_code": "",
"operation_id": "81986b57-569c-4f8a-9b9b-468b26127b8c"
},
"data": {
"phone_number": null,
"email": "kyle+test124@rapyd.net",
"first_name": "Samson",
"last_name": "Smith",
"id": "ewallet_2b15c5c8ffe245adb15dbb9aa1125659",
"status": "ACT",
"accounts": [],
"verification_status": "not verified",
"type": "person",
"metadata": {
"merchant_defined": true
},
"ewallet_reference_id": "Samson-Test-04202023",
"category": null,
"contacts": {
"data": [
{
"id": "cont_2d8ee0f6d750c999ffbb7ddb506b955c",
"first_name": "Samson",
"last_name": "Smith",
"middle_name": "",
"second_last_name": "",
"gender": "not_applicable",
"marital_status": "not_applicable",
"house_type": "",
"contact_type": "personal",
"phone_number": "+14155551311",
"email": "kyle+test123@rapyd.net",
"identification_type": "PA",
"identification_number": "1234567890",
"issued_card_data": {
"preferred_name": "",
"transaction_permissions": "",
"role_in_company": ""
},
"date_of_birth": "2000-11-22",
"country": "US",
"nationality": "US",
"address": {
"id": "address_8fc35d55352234751d2b32eb30f65ade",
"name": "Samson Smith",
"line_1": "123 Main Street",
"line_2": "",
"line_3": "",
"city": "Anytown",
"state": "NY",
"country": "US",
"zip": "12345",
"phone_number": "+14155551111",
"metadata": {},
"canton": "",
"district": "",
"created_at": 1682033715
},
"ewallet": "ewallet_2b15c5c8ffe245adb15dbb9aa1125659",
"created_at": 1682033715,
"metadata": {
"merchant_defined": true
},
"business_details": null,
"compliance_profile": 0,
"verification_status": "not verified",
"send_notifications": false,
"mothers_name": "Jane Smith"
}
],
"has_more": false,
"total_count": 1,
"url": "/v1/ewallets/ewallet_2b15c5c8ffe245adb15dbb9aa1125659/contacts"
},
"wallet_operational_currency": null
}
}
Wallet Balances
The funds that are sent into Virtual Account are stored in a Rapyd Wallet. We can check the balance before the simulated transaction and after.
Wallet balance before Virtual Account transaction: 0
Wallet balance after Virtual Account transaction: 150000
Request
GET https://sandboxapi.rapyd.net/user/:wallet/accounts
Response
{
"status": {
"error_code": "",
"status": "SUCCESS",
"message": "",
"response_code": "",
"operation_id": "bfd51c85-4fd9-4105-ac99-8b83f29b29c8"
},
"data": [
{
"id": "1c4cc29b-9951-40dd-9004-7fdb0c4dc777",
"currency": "EUR",
"alias": "EUR",
"balance": 150000,
"received_balance": 0,
"on_hold_balance": 0,
"reserve_balance": 0,
"limits": null,
"limit": null
}
]
}
What are Bank Accounts?
Bank accounts are third-party accounts that allow businesses to deposit and withdraw funds, make payments, transfer money to another person or institution, pay bills electronically, and more. Bank accounts enable businesses to spend without cash on hand and receive direct deposits from employers or other institutions.
Bank accounts can be used to fund a Rapyd Wallet, send money to a Virtual Account, and be added to the Rapyd Client Portal. When added to the Client Portal, a bank account can fund as well as receive settlements from your Rapyd Client Wallet.
While bank accounts are widely used, they are not always the best option for businesses. They can be time-consuming to set up, often require minimum balances, and may not be available in all countries. Additionally, banks may charge high fees for transactions, making it more expensive for businesses to manage their finances.
Key Differences
The key differences between Virtual Accounts, Rapyd Wallets, and bank accounts are the purpose for which they are used, but mainly how they may interact and allow a business to accept, hold or transfer funds. Virtual Accounts and Rapyd wallets are both managed through the Rapyd platform and can be easily created and managed online. They also tend to have lower fees for customers than bank accounts, making them a more cost-effective option for a customer to use.
Bank accounts, on the other hand, are managed by third-party banks and often require a higher level of documentation and verification. They also tend to have higher fees, making them a more expensive option for businesses.
Virtual Accounts, Rapyd Wallets, and bank accounts all serve a similar purpose in the fintech world, but they have different advantages and disadvantages. Virtual accounts and Rapyd wallets are more convenient and cost-effective. While bank accounts may be more established, they may require more services to help track the full flow of funds. By understanding the benefits of each option, you can determine which one suits your needs to leverage for your business.
You can get started in testing right now by doing to dashboard.rapyd.net/sign-up, grab your API keys and immediately test in Sandbox.