Terminologies

Understanding the key terms used in Virtual Account Services is essential for seamless integration and usage of the API. Below are the definitions and explanations of the core concepts:

Merchant

A merchant is a business entity or client of a financial institution that utilizes virtual account services. Unlike regular banking clients, merchants have access to additional features such as:

Invoicing – Generating and managing payment requests.

Refunds – Issuing reimbursements for completed transactions.

Notifications – Receiving real-time webhook updates on account activities.

Advanced Fund Management – Using collection accounts and automated reconciliations.

Merchants typically operate in industries such as e-commerce, fintech, and financial services, where managing multiple customer payments efficiently is crucial.

Group Codes

A Group Code is also known as a parent account that manages a set of virtual accounts (sub-ledgers).

Before creating virtual accounts, a Group Code must be established. It defines the rules for virtual account creation, including:

Account Number Prefixes – Specifies how virtual account numbers should be structured.

NUBAN Generation – Determines whether the client can specify a NUBAN (Nigerian Uniform Bank Account Number) or if it should be automatically generated.

Fund Management Rules – Configures how virtual accounts interact with collection accounts.

Each Group Code serves as an organizational unit, ensuring that virtual accounts are properly categorized and managed.

Virtual Account

A Virtual Account, also known as a sub-ledger, is a system-generated account that allows merchants to track and receive payments on behalf of their customers.

Key Characteristics of Virtual Accounts:

Created for customers of a merchant to facilitate transactions.

Instantly discoverable by other banks and capable of receiving funds.

Linked to a merchant’s Group Code, ensuring seamless reconciliation and reporting.

Virtual accounts are widely used for scenarios such as e-commerce payments, loan disbursements, and utility bill collections.

Collection Account

A Collection Account is a special type of virtual account that aggregates funds from multiple virtual accounts under the same Group Code.

Why Use a Collection Account?

Instead of tracking funds in each individual virtual account, a merchant can consolidate all transactions in one place.

Simplifies fund transfers, as merchants can move money from a single account instead of multiple virtual accounts.

Optional for merchants, but highly useful for businesses managing large volumes of transactions.

For example, an e-commerce platform with thousands of sellers can use a Collection Account to centralize all payments before distributing them accordingly.

Invoices

An Invoice Virtual Account is a reusable virtual account assigned to customers for specific transactions. Unlike standard virtual accounts, invoice accounts are:

Temporarily assigned to a customer for a payment transaction.

Reallocated for future transactions once the payment is fulfilled.

Used to facilitate one-time payments without the need to create a permanent virtual account.

This feature is particularly useful for businesses that handle subscription billing, service-based transactions, or temporary payment requests.

Merchant#

Group Codes#

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Collection Account#

Why Use a Collection Account?#