What RuthB said does ring true.
2017?s most read: Virtual accounts: the brave new world of cash management
From the article above:
Introducing virtual accounts
In essence, virtual accounts are a series of dummy sub-accounts linked to a physical current account, which can be used by treasurers to manage working capital processes. From a user?s perspective, these dummy accounts offer the same capabilities as a bank account, but without the associated administrative workload and costs so therefore drastically reduce the need for real physical accounts.
While the concept comes across as new, virtual accounts have been prevalent in Asian markets for over a decade and in the Nordics via a similar liquidity management offering. The re-emergence of virtual accounts in European markets is largely due to the sophistication the product offers today and the variety of business propositions it can support.
Virtual account propositions
From a European context, two different product propositions are predominant ? virtual IBANs and virtual account solutions.
Virtual IBANs are a series of dummy International Bank Account Numbers (IBANs) that reroute payments to a real physical account. This creates an opportunity for corporates to issue dummy accounts on a large scale; for example assigning each virtual IBAN to a client, or each to an invoice. When a client makes a corresponding payment, these are automatically routed to the physical account. The virtual IBANs are also captured in the account information, thus allowing corporates to identify the originators, match them with invoices and thereby enabling straight through reconciliation.
While virtual IBANs streamline the account receivables (AR) process, virtual account solutions on the other hand have a wider scope. These solutions allow treasurers to create dummy account hierarchies for a real physical account and distribute these structures as per the business need (across subsidiaries, entities, regions).
Treasury users also get the flexibility to self-administer accounts using virtual account management tools. With these hierarchies in place, virtual accounts can be used for liquidity management (replacing traditional cash pooling arrangements) and for creating payment on behalf of (POBO) or collections on behalf of (COBO) constructs.