What is a payment account - Is it hard to open a virtual payment account for business
In the last article about the virtual card, FinFan discussed deep insight into the applicability of this non-physical payment technology in e-commerce as well as travel services.
From there, we can get a more detailed perspective on the benefits that embedded finance brings to businesses when they can completely use virtual cards to pay for any business needs from shopping to travel.
However, in a centralized financial environment, the origin of fintech services themselves is to support traditional financial services to become faster, more convenient, and safer, but they cannot operate outside the general regulatory framework of the financial management agency in the country or territory.
For example, the purpose of e-wallet is to support users with faster and safer ways to pay using just their phone.
However, an e-wallet account is a payment account managed and monitored by the State Bank and companies providing this service must be licensed to support users in making payments online.
That is the reason why virtual card providers must also comply with several strict regulations of traditional financial services, one of which is that customer has to open a payment account.
In this article, let's join FinFan to learn about the concept of payment accounts and how businesses can open a virtual payment account.
What is a payment account?
A payment account is defined in banking industry terms as a type of account used to receive a salary, receive money, buy and sell transactions, spend, etc.
Accordingly, the amount of money in this account will be used to perform transactions such as depositing/withdrawing cash, transferring money, paying bills, etc.
Types of payment accounts in the traditional financial service
Debit card payment account.
This is the type of account that you can use to pay for all product and service invoices with a spending level equal to the actual amount of money you have on the card.
For example, you can create a debit card account to receive your monthly salary and then use it to transfer money or swipe cards, and shop online for any products or services you want until running out of balance in the account.
At this point, you have to add more money to the card to increase the balance or wait until the next pay period to continue using that card.
Credit card payment account.
In contrast to a debit card account, with a credit card account, the bank will give you a balance in the account to pay for all purchases of products and services. This amount of money is like a loan based on your creditworthiness, so you must pay it back to the bank when payment due date comes.
When the payment deadline comes, there will be 3 cases:
-
You use the full balance or less than the balance and you pay on time and in full the amount you previously spent; the bank will not charge you any additional penalty fees.
-
You spend more than the account limit provided by the bank but still pay on time. At this time, you have to pay an over-limit penalty fee (this fee is based on the regulations of the bank where you opened the card).
-
You cannot pay for the amount you have spent, at which point the bank will charge you a late payment fee (if you pay late beyond the prescribed limit, you will be considered in bad debt).
Payment by cheque/check (cheque/check payment)
Checks are a useful financial tool that makes payments and money transfers more convenient and safer than using cash.
A check or check is a document that requires a bank or credit union to pay a specific amount of money to the beneficiary, which is deducted from the drawer's account.
Checks are a non-cash form of payment for goods and services, contributing to limiting rising cash inflation. There are many types of checks such as bearer checks, named checks, order checks, crossed checks, plain checks, special crossed checks, guaranteed checks, and cash checks.
A check also represents the power of its owner, with high security, only the owner or authorized person with proper legal procedures can use this check.
Checks are popular with many people because of their flexibility, can be easily transferred as well as show the elegance and class of the drawer.
Offline voucher/coupon
Vouchers and Coupons are both used to reduce product prices. To determine the difference between vouchers and coupon codes, you need to distinguish between their two promotional forms. Vouchers are always discounted by a certain amount written on them, while Coupons are discounted by a percentage.
This is the only type of payment that does not involve a bank and customers are allowed to use these vouchers or coupons only once at a time with a deadline written directly on them and usually set by the seller.
Types of payment accounts in the fintech world (virtual payment accounts)
In the fintech world, payment accounts can become many different types, however, the most widely used models in the market are still the following models:
E-wallet
An e-wallet is a type of online payment account that represents a wallet in cyberspace, where you can pay bills online, shop, and top up your phone... To use the wallet, you need to link your bank account, then deposit money into your wallet and conduct transactions.
E-wallets have many functions such as:
- Payment: E-wallets can pay for utility bills, shopping, insurance premiums...
Transfer and receive money: In addition to transferring/receiving money from e-wallet accounts, you can also transfer/receive money to banks.
- Storage: You can store a large amount of money in your wallet so you can easily pay anytime, anywhere.
These functions have helped e-wallets possess many advantages compared to other forms of online payment and are increasingly popular with consumers.
Read more:
. Looking back at Vietnam's e-wallet market - a gold mine but the big guys still report losses
. 3 best e-wallets in the Vietnam fintech market
.There Will Be 50 Million E-Wallets Operating in the Vietnamese Market This Year (2024)
Virtual card payment account
Virtual cards are also a type of card provided to businesses to manage their revenue and expenditure.
The only difference between them is that virtual cards are not issued like physical cards but are integrated into the business's payment system itself and they can be issued by a fintech company that partners with banks in the form of NEOBank or directly by a bank in the form of digital banking.
**Read more: **
. What is a virtual card? Why should companies integrate virtual cards?
Like traditional payment cards from banks, virtual cards also have two forms: virtual credit cards and virtual debit cards.
- Digital/e-check/cheque
Online check or electronic check is a form of bill payment that allows users to pay via the Internet instead of using paper checks. After the bank checks the validity of the check, it will transfer the money to the payee.
The entire payment process is done online, so it saves time and money compared to paper checks. Experts estimate the cost of using electronic checks is only 1/3 of the cost of using paper checks.
- *E-gift card
Electronic gift cards, also known as e-gift cards, are a form of prepaid debit card containing special incentives for shoppers or users of services.
Typically, gift cards are provided by businesses in industries such as beauty, dining, fashion, and many other fields, to reward customers or as gifts of gratitude.
With an e-gift card, you can easily choose a gift right on your phone without having to go anywhere or find it difficult to search in the store. Choosing a gift on your phone brings great convenience.
Just a few steps to access online shopping applications and store websites to view and compare products and choose to buy. In addition, you can also search by category, price, and brand to meet your needs during the gift-shopping process. Is it hard to open a virtual payment account for business?
Depending on the type of payment in the fintech world, the account opening process may be different (may be need more steps, stricter and harder) but will usually go through the 3 following basic ones:
- Step 1: choose the business that provides the payment model where you want to open a virtual payment account.
This step is quite important, especially for individuals or businesses with cross-border payment activities when at this time, you need to pay attention to multi-currency account issues.
Read more:
- Step 2: Provide complete and right information to the virtual payment account provider.
This step can help the provider conduct KYB steps for individuals or businesses along with checking on the AML system about the business's history. Is it on the suspect list including corruption, money laundering, and financial fraud?
Read more:
. 3 compliance pitfalls fintech cross border payment companies must avoid in 2024
- Step 3: The party providing the virtual payment account expression gives you the product you desire.
After reviewing all information and confirming that the requesting individual and business do not have any paperwork or legal violations, the individual or business will immediately receive a virtual payment account which is exactly as they requested.
Some successful startup models in virtual payment accounts in Vietnam and around the world
E-wallet in Vietnam
- MoMo
With more than 30 million users, MoMo is the leading super application in Vietnam, the first Vietnamese Fintech to achieve PCI DSS International Security Certification version 4.0 (the highest global standard security level today) and is the only great representative of Vietnam in the Top 50 Fintech in the World voted by KPMG in 2019 and became the first technology unicorn in the Fintech industry in Vietnam in 2021.
MoMo's super application ecosystem serves a variety of needs in Vietnamese people's daily lives such as shopping, entertainment, watching movies, traveling, dining, e-commerce, telecommunications, insurance, public services, financial services, volunteering,... Fast, convenient, and safe. The whole world is in your hands, just one touch!
Especially because they have the same thing in common: wanting to bring the best payment experiences to Vietnamese users, MoMo and has joined hands and become one of FinFan's reputable partners in our e-wallet aggregator product. Up to now, after nearly 3 years of developing and upgrading the system, FinFan, our international online remittance and domestic e-wallets partners have supported many customers with a faster, easier transfer, and safer cross-border payment method through successfully deploying more than 300 thousand successful transactions direct to e-wallets.
- ZaloPay
ZaloPay is an e-wallet platform and online payment system developed by ZION Joint Stock Company (a member of VNG) to deploy in-app payment and QR code scanning to pay on devices. mobile device, allowing users to make transactions using phones and tablets running Android and iOS.
For many years (from 2018 to 2020), it has been introduced by many channels as the top 5 e-wallets to use in Vietnam.
As a product in VNG's software ecosystem, Zalo users (a VNG product) can use ZaloPay simply by granting Zalo access rights to ZaloPay. Users who want to use ZaloPay will need a Zalo account to activate the service.
ZaloPay can link with most domestic banks in Vietnam, and can also link with international payment cards (such as VISA, Master,...).
ZaloPay uses QR scanning technology (static and dynamic) to perform transactions for retailers. It can replace transactions via chip and PIN or magnetic strip of credit or debit cards at POS payment machines by allowing users to upload this information to the ZaloPay wallet.
ZaloPay is also our extended arm in transferring money internationally from partners such as Ria Money Transfer, Remitly, Paysend, MoneyGram, and TerraPay to Vietnam directly into e-wallets.
E-gift card
- PayPal e-gift card for merchants
Think of a PayPal gift card as a digital card, not a physical one, and you can create one with a certain amount of cash value and let your customers avail themselves when they make purchases on your website. As you’re running an online store, you can create PayPal gift cards using the PayPal account and distribute them to customers.
PayPal gift cards allow you to create digital certificates by using existing design templates on the platform with your brand name. It lets you create your own gift cards for your online business and track them in your PayPal account.
Customers can only purchase your products and services using the gift cards you create. Whenever a customer purchase using your gift card, the amount will be deducted from your PayPal account, including the transaction charges.
Once you create gift cards on PayPal, your brand will be listed on the PayPal website and its partner marketplaces, such as Facebook. The potential customers can see your brand's gift card, thus increasing the chance of buying your goods and services.
- Got It in Vietnam for businesses
Born in 2015 with the starting point of the idea of realizing the KakaoTalk model in Vietnam, Got It gradually affirms: every idea can be bigger than what you think, and the power of technology plays an irreplaceable role.
As technology explodes, Got It recognizes the increasing demand for using electronic gift cards from businesses, thereby providing comprehensive gift solutions to help reach and take care of customers after purchase.
Unlike the traditional gift giving model, thanks to technological advantages, the electronic gift model helps businesses optimize operating and management costs. Online deployment also offers the opportunity to scale faster and break down geographical barriers when businesses implement loyalty programs and reward games.
Through cooperation with VNG Group in 2021, Got It is also proud to be the first electronic gift application to integrate with Zalo, deploying a new way of giving gifts that is close, fast and convenient for millions of users.
Owning a gift warehouse from 300 famous brands, intelligently suggested and arranged, helps the giver easily and quickly choose the "right" gift, while also allowing the recipient to use the gift as desired anytime, anywhere.
International virtual card payment account for business
- Stripe
Stripe is a technology company that builds economic infrastructure for the internet. Businesses of every size—from new startups to public companies—use our software to accept payments and manage their businesses online.
Stripe has dual headquarters in San Francisco and Dublin, as well as offices in London, Paris, Singapore, Tokyo, and other locations around the world.
- FinFan
FinFan is a cross-border embedded financial services company, focused on mass disbursement, collection, card processing, IBAN, and digital APM solutions, able to provide valuable input and integration above and for the same purpose.
FinFan has integrated with the most famous MTO, PSP, switch, and core fintech platforms in the world such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal , Ripple, TripleA, FoMo Pay, Wings or Zalo.
For more information, visit:
🌐https://finfan.io
📞(+84) 2866 85 3317
✉ support@finfan.vn
LinkedIn: FinFan
Dr. Tuyen Nguyen
Money Beyond Borders
