ConnectPay Launches Virtual Accounts to Solve Verification of Payee Challenges for Financial Institutions

ConnectPay has launched virtual IBANs (vIBANs) for licensed financial institutions, enabling EMIs and neobanks to provide dedicated account identifiers to their business customers. The move addresses tightening Eurozone regulations on Verification of Payee, which require account names to match the beneficiary to prevent payment friction and fraud.

What was announced

The new Virtual Account offering allows Electronic Money Institutions (EMIs), payment institutions, and specialized banks to issue unique IBANs to each of their business clients. These vIBANs are linked to a single master account held at ConnectPay, but function as independent beneficiary accounts for end-users. The service is available to licensed entities established in jurisdictions accepted by the provider.

The service is designed to solve a growing reconciliation and compliance challenge within the SEPA zone. Traditionally, many financial institutions have collected payments for their business customers into a single shared pooled account, manually sorting them after receipt. However, since 9 October 2025, banks and payment providers in the eurozone must check that the payee’s name matches the account before a euro transfer is authorized. When a payer sends money to a business but the account belongs to that business’s provider, the names do not match, triggering a warning that can lead to payment abandonment.

Under the new system, when a payer sends money to a business using a ConnectPay vIBAN, the business’s name appears as the account holder. The infrastructure supports SEPA, SEPA Instant, and internal ConnectPay transfers. Institutions manage these accounts through an API, ensuring that every transaction is automatically reconciled with the correct customer name and vIBAN on the master account statement. The partner institution retains full control over the customer relationship, including onboarding and compliance checks, while ConnectPay provides the underlying account infrastructure.

"Financial institutions don’t need another pooled account. They need each customer to have their own IBAN, their own name on every payment, and a clear record of who paid what. Building that in-house takes scheme access, new infrastructure and a team to run it. We built it once, so our partners don’t have to,"

Marius Galdikas, Founder and CEO of ConnectPay

The companies involved

ConnectPay is a prominent embedded finance provider based in Lithuania, operating within one of Europe’s most active fintech hubs. The company specializes in providing banking infrastructure for internet-based businesses, offering services that include SEPA and SWIFT payments, multi-currency accounts, and card issuance. As an Electronic Money Institution regulated by the Bank of Lithuania, it has positioned itself as a key infrastructure layer for other financial service providers across the European Economic Area.

The firm has recently expanded its influence by leveraging its internal technology stack for broader market use. Under the leadership of Chief Executive Officer Marius Galdikas, the company has transitioned from a pure-play EMI into a provider of "Banking-as-a-Service" (BaaS) tools. Its focus remains on licensed entities—such as other EMIs and specialized banks—that require robust, compliant rails to scale their own operations without the overhead of building direct scheme access or complex ledger systems from scratch. ConnectPay’s role in the market is defined by its ability to bridge the gap between traditional banking requirements and the agility required by modern neobanks and payment platforms.

What FF News has reported before

FF News has closely tracked ConnectPay’s expansion and corporate evolution, including the recent appointment of Chief Compliance Officer Tomas Bolotinas to the Management Board. This governance move followed a significant structural change when ConnectPay spun off Serdis, a core banking platform that had processed €14 billion in transactions.

The company’s geographical reach has also been a focus of prior reporting. In Southern Europe, ConnectPay and GenToo partnered to introduce digital banking services to the Spanish retail market. More recently, the provider collaborated with Benefit Bridge to launch an employee benefits platform in Greece, marking a first for that market by combining benefits with earned wage access.

What this means

The introduction of vIBANs for financial institutions is a direct response to the European Banking Authority’s push for greater transparency in the payments chain. By making Verification of Payee (VoP) a mandatory hurdle, regulators are effectively ending the era of "black box" pooled accounts for business payments. This puts significant pressure on smaller EMIs and neobanks that lack the resources to build direct clearing access. The industry is moving toward a model where the underlying infrastructure must be invisible to the end-user to maintain trust. For the wider fintech sector, this highlights that compliance is no longer just a back-office burden; it is now a primary driver of product architecture.