Issuing Account Numbers with Bloc Virtual Accounts

Bloc Accounts is a fully licensed product that allows businesses to issue NDIC-insured NUBAN bank accounts to their customers...

Bank accounts have been a part of our finance culture for quite a long time.

Many young people today probably cannot relate to a past world where bank accounts didn’t exist. And when technology was introduced into banking and finance, the outcome was inevitable. We all looked forward to technology innovation that provided easy access and ubiquity in finance.

Unlike when you had to go to a bank branch and queue to open a bank account, technology has made it possible to own an account minutes after you’ve thought about it. This obsession with democratising access to simple banking functions kickstarted a revolution. People in remote villages now own accounts without ever seeing the four walls of a bank branch.

Many things contributed to this advancement in financial technology, one of which is a product offering called “virtual accounts”.

What are Virtual Accounts?

Virtual accounts are bank accounts issued digitally, typically via APIs. Everything you can do with traditional bank accounts can also be done with a virtual account — savings, business banking, bank transfers, etc.

Bank transfers are one of the most common forms of transactions today. In Nigeria, bank transfers are powered by NIBSS Instant Payment (NIP) — an infrastructure responsible for the instant settlement of bank transfer transactions between banks. Because of this, customers expect that most FinTech products offer a bank transfer option by default.

FinTechs have to own a banking licence to legally issue these accounts or partner with a bank/an infrastructure provider. Since owning a licence is very expensive, the obvious choice for most companies is to choose the latter and leverage Banking as a Service (BaaS).

BaaS is an infrastructure model that allows you to embed basic banking services like account opening into your product. This is typically offered by banks or FinTech infrastructure companies like Bloc.

Whatever bank account you open via a BaaS infrastructure is referred to as a virtual account.

What is the Difference Between Virtual Accounts and Wallets?

Wallets and virtual accounts are not the same, even though they are sometimes used interchangeably.

A wallet is a store of value and cannot hold money. The primary function of a wallet is to show customers their balances. On the other hand, virtual accounts are licenced to hold money and also show customers their balances.

Here’s an example:

Product X is a savings and investment product. Every time you log in as a customer, you see your balance on your dashboard. That is your wallet. Every other customer also has the same thing on their respective accounts.

However, in the background, all money deposited to Product X is actually settled in one place, typically referred to as a settlement account. If 10 customers deposit money into their accounts, everything is settled as a cumulative sum into one account. Then, a wallet system — built on this settlement account layer — is responsible for presenting how much money each customer has left with the startup (aka, their balances).

Wallets vs Virtual Accounts

Note that the settlement account must be a licenced bank account. According to CBN regulations, only companies and products with a banking licence can hold funds.

With Banking as a Service, Virtual Accounts are licenced products that allow companies to hold funds for each customer independently. With virtual accounts, there is no single place for settlement. Every customer can hold their funds in their respective virtual accounts.

About Bloc Virtual Accounts

Bloc is a Banking as a Service infrastructure provider that helps companies embed digital financial services into their product or business model. These services include account opening, card issuance, transfers, bills payment, and cash withdrawals, to name a few.

Our Virtual Accounts API is a fully licensed product that allows companies to issue NDIC-insured bank accounts to their customers. It complies with all KYC requirements and is backed by a CBN-issued Microfinance banking licence (powered by Banccorp Microfinance Bank). This means that we can legally hold customers’ money.

We only offer NGN accounts. Foreign accounts are a part of our roadmap and would be available in the future.

Please note that we don’t currently offer wallet infrastructure. However, our Virtual Accounts API has two key features that fit into almost any use case you might have for virtual accounts: Collection Accounts and Fixed Accounts.

Collection Accounts

Collection Accounts is a feature available on the Bloc API, strictly used to collect payment from customers via bank transfer. When you create a collection account, all bank transfers to that account will be automatically recorded as transactions from the paying customer.

A collection account is disposable, i.e., it is only valid for the duration of one transaction. Once payment has been confirmed, this account expires and is no longer available for use again. There is no limit to the number of collection accounts you can create.

Other things to note are:

  • Collection Accounts do not hold money. They provide a funnel to receive payments, and all funds are settled into the organization’s account (accessible on the Bloc dashboard).
  • Every successful transaction attracts a flat fee of NGN40.00 charged to the company.
  • The account name is the name of the company. The company, not the customer, owns it.
  • You do not have to do KYC for your customers because the customer does not own the account.
  • There is no stamp duty deducted from payments made into a collection account. Stamp duty is a fee typically deducted from bank deposits in compliance with CBN regulations.
  • You cannot withdraw or transfer money out of a collection account.

Use Cases of Collection Accounts

Any business or product that only wants to offer bank transfers as a payment method can use Collection Accounts. Some of them include:

  • Bank transfer checkout: Build or embed a no-code checkout widget to receive bank transfers. A collection account number will be presented to the customer, and any transfer made into the account will be recorded as a transaction. You can also automatically check whether customers have successfully completed payments before confirming the transaction.
  • Wallet funding: If you have a wallet-based product, you can use Collection Accounts to fund your wallet with a bank transfer.

Fixed Accounts

Fixed Accounts is a feature on the Bloc dashboard and API that allows companies to open and issue bank accounts to their customers. Unlike Collection Accounts, these accounts do not expire, and they require KYC because the customer owns them.

Customers can receive, withdraw from, and spend out of this account. Fixed Accounts can be used for an unlimited amount of time as long as the customer continues to use them. They are like traditional bank accounts, except that they are created virtually.

Other things to note are:

  • Customers’ funds are NDIC-insured and are not accessible to the organisation as they please. However, in the rare cases where the company chooses to switch providers, we follow a well-laid-out process to ensure migration while keeping customers’ funds safe.
  • They do not attract any fee for deposits. However, in compliance with CBN regulation, a stamp duty charge of NGN50.00 is charged to the account holder on any deposit above NGN10,000.00.
  • You can withdraw and send money out of a fixed account.
  • Companies must provide the required KYC details of their customers as outlined.

Use Cases of Fixed Accounts

Fixed Accounts can fit several product use cases. Some of them include:

  • Digital bank: Offer account opening services to customers without building from scratch. Manage KYC verification and compliance automatically with Bloc. Create and issue unlimited virtual accounts.
  • Create Sub-accounts: Create a main account and aliases (or sub-accounts) for specific needs and departments. For example, for expense management, Kunle Ojo can create an alias for his car expenses named “Kunle Ojo — car” under his main account, “Kunle Ojo”.
    Another example would be parents looking to create virtual accounts for their children who are still minors. With Fixes Accounts, a parent can create unlimited sub-accounts for their kids tied to their main account. If the parent’s account name is “Esther Kenny”, her child’s account name will be “Esther Kenny — Samson”.
  • Seamless user experience: Automatically check whether customers have successfully completed payments before confirming the transaction.

What is Know Your Customer (KYC)?

Know Your Customer (KYC) is an identity verification requirement by the CBN for all account holders. It allows us to record and confirm who owns a particular bank account.

According to CBN regulations, there are three different tiers of KYC verification. Each tier has its own requirements and limits (in case you do not meet them).

Tier 1:

This is the basic level for any account holder. The information required at this tier are full name, address, country, date of birth, place of birth, gender, and your image.

This is the lowest KYC tier and the easiest to provide by any customer. Once provided, the customers can begin to use their account, but there are limits. If customers go beyond these limits, their accounts will be blocked or reported until they upgrade KYC to the next tier.

In this tier, customers are limited to:

  • a maximum available balance of ₦200,000. Customers can have no more than ₦200,000 at any point of a transaction;
  • a maximum deposit of 20,000. No one can transfer more than ₦20,000 at once to the customer;
  • a maximum transfer/withdrawal limit of ₦3,000. The customer can spend, withdraw or transfer more than ₦3,000 at a time from their account;
  • a maximum daily cumulative debit amount of ₦30,000. The maximum amount of money they can withdraw in a day is NGN30,000.

Tier 2:

Customers who need to do more with their accounts will need to provide more information to verify their details. In this tier, the information required are Bank Verification Number (bvn), means of ID and an image of the ID.

Typically, this should be a nationally recognised identification document like a voter’s card, international passport, national ID card, or NIN slip.

Company identity cards are not recognised.

In this tier, customers are limited to:

  • a maximum available balance of ₦1,000,000;
  • a maximum deposit of ₦50,000;
  • a maximum transfer/withdrawal limit of ₦10,000;
  • a maximum daily cumulative debit amount of ₦100,000.

Tier 3

This is the highest level of KYC verification. In this tier, the only information required is liveliness check

A liveliness check is an essential factor in detecting fraud. It is powered by a technology that can differentiate photos/videos taken in real-time and those taken from a copy of a photo.

In this tier, customers have the following restrictions:

  • no limit on their maximum available balance;
  • no limit on the maximum deposit receivable into the account;
  • a maximum transfer/withdrawal limit of ₦1,000,000;
  • a maximum daily cumulative debit amount of ₦5,000,000.
KYC Levels

Use Cases of Virtual Accounts

There are several real-life applications for virtual accounts; luckily for you, Bloc can power most of them.

  1. Payment Links: You can create a no-code payment page for your customer to receive payments via bank transfer. Depending on your product, it can be powered by either a Collection Account or a Fixed Account.
  2. As a payment method: If you are building a wallet-based product that requires your customers to be able to fund their wallets, you can use virtual accounts to offer them bank transfers as an option. With Bloc, we’ll also provide you with the settlement account, and you can build your wallet system on top of it.
  3. Digital Bank: If you are building a digital banking feature in your app and need your customers to own bank accounts, issuing fixed accounts is your safest bet. Via the Bloc API, your customers can sign up and complete their KYC details in minutes from your app.
  4. Crowdfunding and donations: If you power donations for your customers, you can use virtual accounts to power bank transfer payment methods. With our API, you can also return other important data such as transaction history, transaction references, etc.
  5. Payouts: A large company with hundreds or thousands of employees can issue virtual accounts to all its employees. These employees can operate their accounts as their regular bank, and the organization can manage payroll better while keeping the funds within their system.

Getting Started with Bloc Virtual Accounts

To get started with Bloc, set up your accounts in a few clicks here.

We are also available to attend to any enquiries you might have about our product. Please shoot us an email to our support team at

Toluwanimi Olubanke