Why I can't take a Monzo Business Account [Tide's pricing structure is better!]

I got to the last page of my Monzo Business Account application but decided to reconsider things for a couple of days before submitting my application. Unfortunately, I have decided not to proceed because the pricing structure doesn’t work for me. So I won’t be taking up Monzo for my business banking.

Here’s why:

I’m an IT Contractor who provides services through a limited company. I send one invoice a month to my client, pay for a handful of expenses on my card, and withdraw the rest as income. Its about 10 transactions per-month max.

With Tide, my bank-charges are less than £1 per month. Rightly so - why should I pay the same amount as a larger company which makes hundreds/thousands of transactions per month? £60/year doesn’t sit well with me. Essentially, Monzo business banking would cost £0.50 - £1.00 per transaction based on my amount of use. That isn’t a smart charging model.

Furthermore, I often take 6-12 months out of work between assignments to pursue other activities like travel. When I do this, Tide charges me nothing. With a Monthly charge on Monzo, I will be paying Monzo just for holding my account open.

So there you have it! As much as I have been waiting in anticipation of the switch to Monzo, I will be sticking with Tide. Hopefully Monzo will take this feedback on and tweak their pricing model to make it fairer for smaller businesses like mine.

It feels like Monzo have launched a challenger business account, with the pricing model of a traditional business bank account.

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Being an IT contractor I would have thought that you would be aware of the cost of running and developing the software to allow you open a bank account. It really is not free.
Monzo is a business, you run a business and banking is one of the costs running a business.

Also, with the business account the fee’s are tax deductible as so you are talking around £50PA for the convenience and service that Monzo supplies from one business to another.

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Tide is an internet challenger bank like Monzo, they also have operating costs - and a fair pricing model.

Monzo launches a Business account, but with the pricing model of a traditional bank.

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you should of course use the service that best suits you in terms of cost / functionality

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Tide aren’t a bank last time I checked they’re an e-money solution.

Just so it’s clear - Monzo are looking at other pricing structures so no doubt your feedback will be noted.

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Try starling. No fee

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Tide use the same E Licence as Coconut, my experience of this on the 1st transaction for expenses you need double the invoice fee if paying by card as they do not have 3DS and duplicates the transaction and refunds the 1st one but you need double the funds to process it :wink:

For the time being, I’ve also decided not to complete a business account application for pretty much similar reasons.

I can do without fixed monthly fees when the transactions are sporadic and relatively low income for side projects and occasional freelance work. I used to be with Tide until Starling supported sole traders, and have since moved to them and am very happy with them as a bank and the app.

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For sole traders who don’t need all the bells and whistles, Starling is currently unbeatable, IMO

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Tide isn’t a bank…

Let’s not get hung up on semantics. Tide is an FCA Regulated Electronic Money Institution.

What’s a “bank” these days anyway? Does it need to have bricks, mortar or a safe?

It’s a company where I keep my money. It’s a bank. They describe themselves as “The Leading SME Challenger Bank”

Ah, okay. In that case my pocket is also a bank. See, I can call random things banks too.

The FCA have clear definitions for what a bank is. I trust you can navigate to their site. Tide has this on their FAQ:

We’re not a bank. The Tide current account is provided by our partner with Prepay Solutions (PPS), which is an electronic money institution authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 (FRN 900010) for the issuing of electronic money. PPS holds an amount equivalent to the money in Tide current accounts in a safeguarding account with Barclays Bank PLC which gives customers protection against PPS’ insolvency.

Emphasis mine. Not sure whether that can be any clearer.

If keeping your money in a company means its a bank, then congratulations - you own a bank! You presumably keep money in your company account, right?

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There’s differences between the FSCS coverage between banks and FCA for E money institutions and the way money is held and returned if the institution suddenly closes

Some people prefer the security of a banking license

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Bank or not a bank is a side issue here…

This is exactly why I won’t be opening a Business Account with Monzo. The value offering isn’t right FOR ME.

Yes, I know Monzo need to make money (I work in software too), but the business account currently appears to be aimed at med-high volume traders which, as a sole trader/contractor neither I nor the OP are.

I hope in future Monzo look at their pricing but for now I’m passing. Thanks to @reach4thelasers for posting this as it’s been in my head for a while. All feedback is good feedback, and Monzo must be aware there are plenty of low/free fee options available in the business account marketplace.

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Why not get a Starling Business account then? No charges on their account.

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Or Revolut. If you have only a few transactions a month it’s free and they have virtual cards and a web version

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Or… stick with the business account I already have! No change is always a valid option :slight_smile:

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~Yawn - if anyone wants to discuss further what is a bank and what isn’t a bank - open a new thread please. Thanks.

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Thanks @gmclean Hopefully Monzo will notice the feedback and take action - they usually do.

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What’s there to discuss? You called Tide a bank. It’s not. End of story. I’m unsure as to why this is so hard for you to comprehend.

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