Virtual Client Accounts

Virtual accounts are assigned their own dedicated IBAN/account number by the service provider. However, the service provider does not track the balance of these accounts. Instead, all virtual accounts are created under, and therefore linked to, a real account, and any balance movements in the virtual accounts affect this real account.

Service Providers

Clearbank and LHV can issue virtual accounts for clients.

Account Model Diagram

• Accounts: Virtual client accounts (Client Account 1 to n) are all connected to a central Client Money Account at the organization level.
• Incoming Transfers: When funds are received (i.e. an incoming transfer) to any client account or the Client Money Account, the Client Money Account is credited. Even though the funds are aggregated into a single account, each virtual account has a defined account holder.
• Outgoing Transfers: For outgoing transfers, funds are debited from the Client Money Account, but the sender can be any client account or the Client Money Account itself.
• Internal Transfers: Internal transfers between different client accounts do not involve the service provider as client funds are aggregated in the Client Money Account; they only update the IF Platform's ledgers of client accounts.
• Exchanges: Client exchange transactions are processed directly through the Client Money Account.
• Fund Collections such as fee or card transaction collections, are processed from the Client Money Account to a dedicated Operational Account designated for that purpose.
• Scalability: Since the client funds are aggregated in the Client Money Account, this model simplifies the management of large numbers of client accounts, reducing financial operational complexity.
• For more details on how different transaction types are processed in this model, refer to Virtual Client Accounts - Flow of Funds.

Currently, only a single Client Money Account is supported per service provider, per currency, and per environment.