UK Fintech challenger bank Monzo added a business focused product in early 2020, and have since gone on to attract over 85,000 businesses to their platform. Tide offer only business accounts to firms in the UK. Formed in 2015 and launched in 2017, Tide announced in early 2021 that they now had over 400,000 businesses holding accounts with them. The question is, which one would be best for you to use for your business banking?
Monzo Business vs Tide – Plans, Costs & Fees:
Tide offer 3 account tiers:
|Tide Plus||£9.99 per month|
|Tide Cashback||£49.99 per month|
Tide offer the majority of the account features within their Free account package, and charge set fees for key account functions.
With the debit card, payments are free across all tiers.
£1 per ATM withdrawal – across all account tiers.
Tide charge £0.20 per bank transfer into or out of your account. Tide Plus includes 20 free transfers per month, whilst Tide Cashback includes 150 per month.
Cash can be deposited into your account via the Post Office, with a charge of £1 per deposit. Alternatively, you can pay in cash via PayPoint locations, which is charged at 3% of the amount deposited.
On Monzo Business you can choose from 2 account levels:
|Monzo Business Lite||Free|
|Monzo Business Pro||£5 per month|
Payments with the debit card are free across all tiers.
Monzo have no charge for transfers in or out of your account, if originating or from or going to the UK.
Monzo charges fees for certain account functions:
Customers are able to deposit cash at PayPoint outlets, at a cost of £1 per deposit. Business cannot pay in more than £1000 every 6 months. Anywhere within the European Economic Area (EEA) (including the UK), cash withdrawals are free. Outside of the EEA, withdrawals up to £200 per month are free. Amounts above that will incur a fee of 3%.
/ Verdict /
Cost-wise, its Monzo all of the way. Their premium package is cheaper, and they have no fees on any of their tiers for bank transfers within the UK, whereas Tide charge £0.20 per transfer.
Tide vs Monzo Business – Features:
Integrate Accounting Software
Tide facilitate the automatic connection of your accounting software to your Tide account. Packages supported include Xero, Sage and Quickbooks.
Computer & App Access
Tide accounts are accessible from both your computer and smartphone app.
Tide provide invoice management functions, such as the invoice assistance tool. The Tide app can automatically send reminders for invoices that are due, saving valuable time.
You can match expense receipts to your bank statements automatically simply by uploading images.
Stay informed of any account activity in real time with instant notifications.
Get debit cards for your staff for their expenses. These cost £5 per card on the Free account. One card is given free on the Tide Plus tier, and you get 3 cards free with Tide Cashback.
If you don’t have your business incorporated yet, then Tide will form your Limited company for you, and set it up with your Tide account.
You can set a percentage of every payment that you receive into your account to be moved to a tax pot within your account. This ensures that you have the tax funds available once it is due.
If you use Quickbooks, Xero or Freeagent for your business accounting, then you can connect your Monzo Business account so that data is easily transferred. If you use different software, you can still download your transaction data in formats that can easily be upload to your accounting package.
Account holders that are limited companies can set up multiple users on the account. The account owner has full control of these.
Send invoices direct from the Monzo app to your customers.
Although smartphone app focused, Monzo can also be used by business customers via their computer.
/ Verdict /
Tide are completely focused on business customers. As such, their entire suite of features is completely built for businesses. Monzo on the other hand, have built their banking features for their far larger consumer business and re-factored them for businesses. Tide simply have the better business related feature-set, so they take this round.
Tide vs Monzo Business – Safety/Security:
Tide does not have a full banking licence, and as such, customer deposits are not protected under the Financial Services Compensation Scheme (FSCS). Tide state that they fully safeguard customer deposits, by completely separating any customer funds from company funds. In addition, customer funds are never used to lend out to other customers, as they might be with other banks. As such, Tide claim the lack of FSCS protection is not an issue.
Monzo are a fully licensed UK bank, and as such, customer deposits are protected up to a maximum of £85,000 per customer under the UK’s Financial Services Compensation Scheme FSCS).
As a start-up, Monzo are still not a profitable company. Indeed, their last financial results in mid 2020 showed losses of over £113 million. However, their business model remains stable, and they have investors in place, so it does not appear that they are in trouble, and Monzo insist their future is sound.
/ Verdict /
Both companies appear healthy and stable, with a large and growing customer base and revenues. There are some concerns with each in regard to FSCS deposit protection for Tide, and ongoing business stability with Monzo, so this round we call it a tie.
Tide vs Monzo Business – International Business/Other Currencies:
Tide only allow payments to be sent or received from a relatively small amount of countries.
Customers cannot automatically make international payments. It is required to apply for an International Currency Account to do so.
Generally, operating between your Tide account and other currencies can be quite complicated.
Monzo do not have particularly simple or reliable methods to receive international payments into their accounts at the present time. The process is detailed here.
Monzo has partnered with Wise, a currency exchange specialist, to facilitate their outbound international payments and currency transfers. Transfers are made at interbank rate, with a small fee added per transfer.
/ Verdict /
Neither of the competitors really shine in this section. Tide are only really set up for UK business, and whilst Monzo do have more options for currency transfer and international payments, it is definitely not optimal. Due to their offer being slightly more comprehensive, Monzo take this round. However, if your business does even a small amount of business across borders, it would probably be better to research a provider that gives you more scope in this area.
Tide Business vs Monzo Business – Verdict
Monzo Business wins on price, but Tide has the better features, whilst both have issues with operating with international payments. If you are a UK focused business, and don’t have a large amount of transactions every month, then Tide would be a great option. If you do have more transactions, then go for Monzo business.