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

I don’t think so. At the moment it’s a flat £5/m for everyone. I imagine this will change though, as a while ago they sent out a survey (I think they’re still sending them out, not sure if it’s the same as the one I got!)

I still think it needs work, and I do hope they separate the invoicing/accountancy features into a separate add-on, or package.

Monzo have basically just suspended their business accounts to new customers on the waiting list and they are telling everyone to look elsewhere for a new business bank account. Very Disappointing.

From Monzo -
“We’ll let you know when we start offering new business accounts again. But if you really need a new business account soon, we’d recommend getting one somewhere else for now.

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  1. £60/yr is not much for a business, especially a limited company. The expenses to get your accounts in order are more than that. How do you do your accounts? That’s about the price of two months of accounting software, outside of any promotional offerings. As an IT contractor, you must be paying more just for your software tools. £60/yr for your bank account is nothing in comparison.
  2. I prefer Monzo’s pricing. I disagree with your assessment that “[this] isn’t a smart charging model” and “It feels like Monzo have launched a challenger business account, with the pricing model of a traditional business bank account.”.
    I looked into Tide before, I don’t like the unpredictability of their pricing. They bill on usage. They might actually be cheaper currently for my needs, I didn’t bother do the math, I don’t like paying for usage. If I have some reason for a lot of transactions or something, I don’t want to have to pay a charge for all of that. I want to pay one monthly fee that does not charge regardless of how my usage differs. It’s predictable and guaranteed.

A free business account may be more suited for your needs.

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The regulatory position and license these companies have is not semantics.

Being FCA regulated doesn’t mean anything by itself. The FCA regulates many categories of financial organisations. An e-money transmitter is also regulated. PayPal operate under this license, and you can keep your money there, would you call PayPal a bank? I would not. Revolut, Tide, and others are operating under the same license. Revolut has struggled to get a banking license. That alone demonstrates the burden to get a banking license is greater.

E-money transmitters are not regulated in the same way. Revolut have a long history of suspending accounts for random ‘investigations’, often fruitless, of their long-time customers. You’ll find complaints about it everywhere in large relative volume. Their customers will have no access to their funds at all in many of these cases for long periods of time, I’ve seen reports of months and counting. FCSC protection is not available to e-money transmitters.

Banks are differently regulated and your funds are better protected. It’s definitely not a semantic difference.

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Also an IT contractor. Used to use Tide.

Starling refused to open a business account for me for a year, because I’d previously had a personal account. I have no intention to ever give them any business again.

I think Monzo’s fee is worth it and whilst higher than Tide, it’s not significant. Faster payments are instant, there’s the API and once you’ve paid once that’s it. It’s a technically superior platform for sure. I expect pricing to potentially change in the future once it’s no longer in early access, but we’ll see.

I’m not sure it’s going to go down, though, to be honest. Monzo’s business pricing is similar to, or cheaper, than the pricing other traditional banks offer for small businesses (post promotional periods). Yeah, you can take advantage of 24 month free banking switch offers by Barclays, HSBC, and others, and they sometimes have a promotional free period too, but after that Barclays is £6.50/mo + not included charges for the e-payments plan. HSBC is £5.50/mo + charges. Lloyds £6.50/mo. etc.

Monzo appears to be the cheapest priced business bank account by any regulated bank. For organisations operating as a limited company, I think the £60/yr expense is minimal, even for the smallest organisations. Sole props may find the £60/yr to be a more notable expense, but still, compared to accountants, accounting software, and other business expenses, it’s not that much to pay for your bank account.

Tide’s usage-based billing makes me uncomfortable, personally. I’d rather pay £60/yr and know it won’t change regardless of what I do in the year, than have to think or worry about the costs of making a transaction to someone, or doing something else. I prefer all-inclusive pricing if it’s priced well, the cushion is just a bit better.

I actually remember seeing some suggested pricing with a free plan - it had some cut down features though (no expenses integration for instance). Whether this will have any bearing on what happens, I’m unsure - but I think it’s a nice gesture nonetheless particularly for those just starting out.

100% agree with this, I know what Monzo’s fees are for the next year and it’s one less thing to worry about. I don’t enjoy dealing with the financial stuff and paperwork at the best of times anyway, I’d rather be doing actual work.

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Starling?

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Yeah £60 isn’t much - less than an hours pay. But when my current Freelance job finishes I’m going to Canada snowboarding for the season. What then? Close the account? Pay for it even though I’m not using it?

  • Yes £60 isn’t much
  • Yes Monzo is a far superior platform than Tide.
  • Yes the payments are instant unlike Tide.
  • Yes it would be nice to have my business and personal banking in the same place.

But weighing everything up I don’t actually need any of that. Is it with £60 to me? No. So I decided not to submit my application after getting to the last screen.

I use Xero for my Business Accounts, VAT returns, expenses it’s £10/month - it’s a brilliant piece of software and it integrates with Tide. Tide charge me £1 a month for my banking. This is the most cost effect and efficient setup for me at the moment.

Think of that £60/y fee as additional insurance on your money. Tide is not FSCS insured, in fact, no pre-paid cards are.

While the company Tide use (PrePay Solutions) use a ‘safeguarded’ account at Barclays to store all customer funds, I still see it as a risk. If any one of these 3 pieces of the puzzle goes, I have a feeling it’s going to be a long and painful task getting your money out of them. More transparency would be good at the very least.

What about Starling, then?

That’s absolutely an option - but I’ve previously mentioned, I actually prefer Monzo. I imagine Starling will introduce a monthly fee at some point.

Yes, so the £60/y is a “I like Monzo” fee, not “additional insurance on your money”, because you get the same insurance on your money for £0 elsewhere.

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Harsh. That argument can be levelled at just about anything where a cheaper alternative exists so carries very little weight.

Let’s try and keep objective on this if we can please.

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This is keeping it objective. It’s objectively true that you get the same insurance on your money elsewhere for a cheaper price. Just because that argument can be used for loads of things doesn’t make it false, it makes it true for loads of things.

In no objective sense is Monzo’s business account charge a fee for additional insurance on your money.

Not my point at all as you well know.

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Looks like I poorly explained my reason for picking Monzo - My bad. I was exclusively comparing Monzo to Tide and picked the FSCS insurance as an isolated “feature.” Thought it was clear this was a comparison of Monzo vs Tide. Not Monzo vs Starling. I discussed my other reasons further up in the thread, and I think it’s quite clear that they’re more related to convenience and Monzo’s business practices so far. This could always change though!

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