virtual account

A Virtual Account is a pass-through account linked to a real bank account acting as a layer, specifically used to improve inward payment reconciliations. When a business receives payments from multiple sources and over a period of time, it gets difficult to track who paid and for which reason. This is usually reconciled manually by matching reference numbers in the bank statements with screenshots provided by a payer. By creating multiple virtual accounts mapped to the same account, it becomes easier to reconcile different incoming transactions into a bank account. A virtual account could be of 2 types virtual bank account or virtual payment address.

With Cashfree auto collect - cash management services, you can generate any number of virtual bank accounts or virtual payment addresses for each payer or invoice and share a/c details while receiving payments. For repeated customers you can use a dedicated virtual bank account or virtual payment address.

A virtual bank account is type of virtual account which is a digital bank account that exists entirely online, without requiring any physical paperwork or face-to-face interactions with bank representatives. It is typically offered by non-bank financial institutions such as fintech companies and payment processors. A virtual bank account number is created using a software algorithm that generates a unique identifier that can be used to send and receive payments.

A virtual payment address is a unique identifier that is used to send and receive payments through a specific payment system or platform. It is often used in the context of the Unified Payments Interface (UPI) system in India. In the UPI system, a virtual payment address is linked to a user s bank account and can be used to make and receive instant payments. The virtual payment address replaces the need for traditional bank account numbers and IFSC codes, and provides a simpler and more convenient way to make and receive payments.

Once a payer clicks on the NEFT/RTGS mode for making a payment, a challan is created which is nothing but a piece of document that has the bank account details of the benficiary

With the help of our Auto Collect solution, a virtual account gets created every time a transaction is initiated.

A unique prefix gets associated with the payment mode for example 808071- that acts as a Unique identifier

And a virtual account gets created with the combination of the unique prefix and Cashfree transaction id.

For example, if the transaction id is 564162, there will be a virtual account associated with this transaction. 808071564162.

Any incoming payment to this account number will be associated with this transaction and we will mark the transaction as successful and the amount will get settled to the merchant on T+1.

For instance, if TXN is successful on the 18th, the amount will be paid to the merchant on the 19th.

No, it is not possible to hold money on a virtual account. The payment so received eventually passes to the linked bank account. The virtual account used here is used only for payment reconciliation.

For most banks, virtual payment address/virtual bank account based payments can be received only using NEFT or RTGS; IMPS payments fail. The payments are not instant and restricted by banking hours. Using Cashfree’s Auto Collect solution, funds can be remitted to the virtual payment address/virtual bank account through all bank transfer modes including UPI, IMPS, NEFT, RTGS, and even Cheques. Cashfree also helps you create Virtual UPI IDs to accept payments through any UPI app such as WhatsApp or Google Pay. Moreover, for banks, reconciliation of payments happens through files sent over email, which is a once-a-day reconciliation process. For Cashfree, payment confirmation can be received through an API which is a real-time system update for receipt of funds. Cashfree also supports fully numeric virtual payment address/virtual bank account, unlike many banks which work on all bank interfaces -- alpha-numeric bank accounts provided by banks do not work on many of the older bank interfaces, especially on mobile.

No, however for automating outward payments you can use Cashfree Payouts. It is a bulk disbursal solution that helps you send money to any UPI-BHIM ID, Paytm wallet, debit and credit card, or bank account or native wallet. With the inbuilt bank account verification feature, you can also verify the bank account details and ensure that payments hit the right beneficiary bank account. Checkout Payouts here.

No, there is no KYC required for creating the account. You can create any number of virtual accounts and virtual UPI IDs using Cashfree cash management services.

Yes, static QR codes are linked to a VPA. In the Unified Payments Interface (UPI) system in India, QR codes are often used to make payments by scanning the code and entering the amount to be paid. The QR code linked to a VPA, is a unique identifier that is used to send and receive payments through the UPI system. When a user scans the QR code, the UPI app automatically fetches the VPA associated with the code and enables the user to make the payment directly from their bank account linked to the VPA. So, in short, a QR code can be backed by a VPA in some payment systems like UPI.