Personal vs. Business bank accounts


(Saveen) #1

Friday question…

What’s the difference between personal and business bank accounts?

Muchas gracias!


(PhilB) #2

Typically, IME, the charging model, and the fact that business current accounts seldom pay credit interest (even when interest rates were higher). Businesses simply pay more for their banking and are rewarded less (by and large). I expect this is broadly a result of the fact that while it is difficult for a person to exist in modern society without banking facilities, it is arguably insurmountable for a (legitimate!) business to exist these days without banking facilities, but also that business accounts are generally more complex products (in terms of the support structure around them) used by fewer customers.

Business accounts should also offer extensive multi-user functionality to reflect the fact that many businesses will have multiple staff accessing the bank account who need different levels of access/payment limits etc. This prevents users needing to share credentials and improves security/audit trail integrity.

After that, IME, it’s more of an organisational delineation by the banks to segment their different KYC processes to reflect the fact that a business is often not a “natural person” & different risk calculations (which is why they don’t want you running businesses from personal accounts), a slightly different offering of services (eg personal account holders won’t need batch BACS payments) and different marketing spam sent to each.


(Saveen) #3

:smile: Thanks @PhilB

So no major hurdles (bar the risk calculations?) for a full-stack ‘challenger’ bank expanding into the business sector. I’m looking forward to the day!


(Chris Richards) #4

A simple Mondo for Business aimed at self employed / freelancers would be awesome! Business bank accounts are even worse than personal accounts.


(tom) #5

We don’t plan to offer full business accounts because the requirements are so dramatically different. Multi-user access controls, card acquiring, accounting, invoicing, etc, etc

Sole-traders and freelancers are probably close enough to a personal current account that Mondo would work for those cases.


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(Chris Richards) #6

I’d switch in an instant! After the 18 month free period, HSBC charge £5.50 per month, and a fee for non sterling transactions made via the debit card. I wouldn’t mind paying the fee if I thought I was getting a good service, but their website is terrible. Also, with your API it would be relatively easy to integrate with online accounting software e.g. FreeAgent, Xero


(Skippy) #7

Myself and my partner picked up our mondo cards at MadLab in MCR,

We both own a small company (as in just the two of us), two cards linked to the same Mondo account would cover 100% of our useage, perhaps flag which card/user did what. also the ability to ?email? PDF receipts to the receipts list (although this would be nice in general for Apple etc).


(Alan) #8

Agreed - but I understand (from Yehudi) that you currently don’t permit two accounts i.e. two of your Debit Cards to be issued to the same address/person.

I would love a second Mondo Account/Debit Card for my B&B expenditure (I am a Sole Trader) so no one else needs to access the account.


(Saveen) #9

Came across Tide today - a mobile-first small business banking service also backed by Passion Capital and other high profile business angels.

http://www.eu-startups.com/2016/07/tide-launches-alpha-version-of-its-mobile-first-banking-service-for-small-businesses-and-secures-2m-in-funding-from-localglobe-and-passion-capital/


(Alan) #10

So the race is on - Fidor, M(ondo) or Tide - which will be the first to offer small business bank accounts without the dinosaurial (I just made that word up for this post) elements of the High Street Banks?


#11

Have you tried fidor?


( related to Monzo CEO, Investor in Monzo ) #12

I don’t think M… are going to be offering small business accounts at all


(Alan) #13

I have a Fidor Account and their App with some ‘Emergency’ money sitting in there.

Until they have dedicated Account Numbers and their own Sort Code there just isn’t much I can do with the account for business purposes (apart from adding money and spending with the Debit Card).

I need to be able to pay by Direct Debit, pay using BACS/Faster Payments and have it linked to PayPal for processing on my PayPal here machine!