Digital banking platforms, also known as Authorised Payment Institutions (API) or e-money institutions/issuers, generally don’t consider themselves to be banks, but they promise something different to their traditional competitors.
These platforms all offer an alternative to traditional high street accounts, they are quick to set up and operate entirely from your smartphone where you can access all their digital banking services.
According to Finder, one in ten people in the UK have switched to a digital only bank like Monzo, Revolut or Starling for their personal banking. That said, nearly half (47pc) of those who use them keep less than £1,000 in a digital bank. There is hope for these challengers – two-thirds of respondents said they plan to convert fully to a digital bank in the future.
What’s interesting is that rather than holding onto cash, people often use personal mobile banking for secondary functions like spending abroad, transferring cash and budgeting apps.
Even if you’d like to keep the bulk of your cash with one of the traditional banks, having a digital account could see you well in one of these other key business areas.
Take a look at the digital banking platforms below and see what you think.
|ANNA||Smart invoicing, automatically chase outstanding payments, three-month free trial||£5 a month if your monthly income is under £2,000
£11 a month if your monthly income is £2,000 – £100,000
£49 a month if your monthly income is over £100,000
|Revolut||Hold, exchange and transfer currencies with real exchange rate, issue free corporate cards to employees, perks from commercial partners||Companies pay between £0 – £1,000 a month, depending on the account
Freelancers pay £0 for the free account and £7 a month for the Professional account
|Starling Bank||No monthly fees, categorised transactions, integration with Xero and FreeAgent||Free for firms with fewer than 10 employees and less than £1.7 million annual turnover. Larger businesses can get the account free for a limited time.|
|Tide||No fees on card payments in UK or abroad, free transfers between Tide accounts, Tide Mastercard, instant invoicing, integration with FreeAgent, Sage and Xero||Charges per transaction (see below)|
|Monese||Can have accounts in both GBP and Euro for international banking
The app is supported in 10 languages and you can have accounts in both GBP and Euro for international banking
Unlimited transactions, fast bank transfers and direct debits
|£9.95 a month|
|Coconut||Can connect current accounts and credit cards from 20 different banks including Barclays, Lloyds and Starling
Export your data – sole traders can an extra help up with tax reports to help them with their self-assessment
See calculations of how much tax you’ll owe
Tips on what expenses you can claim
|Start is £0 a month – comes with free UK current account, expense tracking, a tax estimate for sole traders, three invoices a month, 2pc on purchases abroad
Grow is £5 a month (excluding VAT) and has everything in the Start package as well as unlimited invoices, free foreign currency exchange and free replacement cards
|Mettle||Create and send invoices directly from your smartphone, complete with company logo
Manage recurring payments in-app, add receipts to transactions and export your expense data
Can connect with Xero
|Free to use and free to join|
|Cashplus||Add up to 20 additional business expense cards for your employees to use
Additional business expense cards for your employees to use
Cashplus integrates with accounting software
Get a business cash advance up to £15,000 to help with cash flow
iDraft (see description)
|Annual fee of £69|
|Countingup||Automated bookkeeping, professional invoices and automated receipt scanning as key features along with and tax calculated and filed for you
Add notes and attachments directly to your transactions
P&L report, receipt capture and tax estimate
|Starter is free for businesses with incoming funds of £0-£500 a month
Standard is free for the first six months (£4.95 a month thereafter) for funds of £500-£4,000 a month
Premium is also free for the first six months (£9.95 a month thereafter) for businesses with incoming funds of over £4,000 a month
|Fair Everywhere||Access to three currency wallets: GBP, USD, EUR
Up to 8pc cashback on any card spending with over 50 major UK high street retailers
All types of small businesses, sole traders and partnerships can apply – and they can link as many cards to the account as you like for employees
|Minimum monthly charge of £12.50 with a £55 application fee|
|Holvi||Send invoices from your phone – synced with your account – and find out when invoices are paid with instant notifications
Comes with business current account for entrepreneurs – has features of a traditional bank account
|Both the free and the Basic accounts are £9 a month|
|CardOneMoney||Text alerts confirming when money is in and to confirm that bills have been paid
Check your balance using text messages
Up to four additional prepaid corporate MasterCards linked to your business account
Export statements to a cloud accounting network
|£12.50 a month plus a £55 application fee|
ANNA is open to any UK resident who is a director of a limited company and non-limited businesses that are structured as a partnership or sole trader.
On the app you’ve got smart invoicing, creating sales and purchase invoices for you in under ten minutes. It’ll politely chase outstanding payments that you’re owed and you’ll be notified about VAT, corporation tax and self-assessment tax return deadlines.
In the future it’ll introduce VAT filing with HMRC as well as tax reminders and payroll services.
You can get a three-month free trial directly through ANNA’s website. After the free trial is over, it costs £5 a month if your monthly income is under £2,000; £11 a month if it’s £2,000 – £100,000; and £49 a month if it’s over £100,000.
Compare ANNA business banking with Know Your Money
Revolut is a good shout for businesses who travel and trade overseas. Customers can hold, exchange and transfer 28 currencies with the real exchange rate.
You can issue free corporate cards to employees so that they can spend fee-free and with reduced expenses when they’re abroad.
To make running your business easier, you can have individual bank account numbers (IBANs) in all 28 currencies.
Revolut comes with perks and benefits from partners such as Apple, Amazon Business, Google Ads, Deliveroo for Business, Seedrs and Slack.
In terms of accounts you’ve got:
- Free (£0 a month)
- Grow (£25 a month)
- Scale (£100 a month)
- Enterprise (£1,000 a month)
Freelancers can choose from the free account (£0 a month) and the professional (£7 a month).
Compare Revolut business banking with Know Your Money
The Starling Bank business account is open to you if you’re self-employed or the owner of a limited company. Firms which have more than one person with significant control will be able to apply for an account in future.
There’s no monthly charge on the account for businesses which have fewer than ten employees and less than £1.7m in annual turnover. For now, it’s free to larger businesses but this is for a limited time.
If you want to deposit cash, you can do so at 11,500 Post Office branches across the country. It’ll set you back £3 per deposit. Each Post Office withdrawal is 50p.
What’s more, you can integrate it with Xero and FreeAgent.
With Tide there are no fees on card payments in the UK or abroad and you get free transfers between Tide accounts. Transfers outside Tide are charged at 20p each, ATM cash withdrawals are £1 and cash deposits at Post Office are charged at £1 and 3pc at PayPoint.
You can have up to 35 team members available per account on the Tide Mastercard.
You’ve also got instant invoicing and the ability to set up scheduled payments. The package is rounded off with in-app support as well as integration with FreeAgent, Sage and Xero.
Compare Tide business banking with Know Your Money
Monese says that it isn’t a bank, instead specialising in multi-currency accounts. It gives you unlimited transactions, fast bank transfers and the ability to get cash out at ATMs globally.
Open an account from your smartphone; Monese ensures you’ll have full access within ‘a matter of hours’.
The app is supported in ten languages and you can have accounts in both GBP and Euro for international banking. To make running your business that bit easier, you can do unlimited transactions.
Convert currency at competitive rates in 14 currencies including US Dollar, Australian Dollar, Euro and Danish Krone.
To keep your money safe, the app uses biometric unlock and backend encryption.
The Monese account will set you back £9.95 a month (but it also gives you the features of a Classic personal account).
For sole traders and limited companies (with up to two directors), Coconut has the functionality to handle banking, bookkeeping, invoicing and tax.
You can connect current accounts and credit cards from 20 different banks including Barclays, Lloyds and Starling. Notifications will let you know that a payment has been made or received, automatically categorising it.
Sole traders can an extra help up with tax reports to help them with their self-assessment. Of course, it has Making Tax Digital-compliant software.
See calculations of how much tax you’ll owe and tips on what expenses you can claim, maximising your tax savings.
The Start package is £0 a month. It comes with free UK current account, expense tracking, a tax estimate for sole traders, three invoices a month and 2pc on purchases abroad.
Grow is £5 a month (excluding VAT) and has everything in the Start package as well as unlimited invoices, free foreign currency exchange and free replacement cards.
Mettle is part of NatWest but is an independent arm. This means that you can’t ring NatWest and expect them to assist with your Mettle account.
You’ll be eligible if you’re a sole trader or a limited company with up to two owners, though you must have a balance of less than £100k (or £50k for sole traders) to apply.
The biggest caveat is that it’s only available in the App Store (Android is said to be in early release), but you do get in-app support from Mettle.
One of the main highlights is that you can create and send invoices directly from your smartphone, complete with company logo. Like Coconut, notifications will let you know when you’ve been paid. However, you’ll need to match the payment to the outstanding invoice yourself.
Again, it goes half-way there in terms of chasing overdue invoices. It’ll remind you that an invoice is overdue, but you’ll have to send the client a follow-up yourself.
Transactions-wise, you can manage recurring payments in-app, add receipts to transactions and export your expense data.
Other than that, you can sync your account with Xero but you can also export to CSV which is compatible with other accounting software.
You might have to wait a little while to sign up. At present, Mettle is only able to process UK passports, EU passports and national identity cards as well as full UK driving licences.
A key consideration you must make is that the app isn’t covered by the Financial Services Compensation Scheme (FSCS). Though it’s backed by NatWest, it’s no guarantee that Mettle won’t go bust. FSCS protects your first £85,000 investment so it’s worth having.
Mettle is free to use and free to join.
Cashplus says that it takes as little as four minutes to apply and only seconds to open an account.
It’s a good account if you already have a few members of staff on your payroll – add up to 20 additional business expense cards for your employees to use.
Get a business cash advance up to £15,000 to help with cash flow and integrate it with online accounting software.
Cashplus gives you a specialist iDraft facility. iDraft is a low-cost credit limit that’s attached to your account in case you run out of cash. Use is covered by your annual fee but there is a flat daily usage charge too.
The annual fee for the account is £69.
Countingup is a relatively new player in the mobile banking market.
Its business offering comes with automated bookkeeping, professional invoices and automated receipt scanning as key features along with and tax calculated and filed for you.
Add notes and attachments directly to your transactions or you can remind yourself to claim tax relief on the purchase.
This is best if your business is UK-based as you can’t make or receive international payments with this account. Countingup hopes to include this feature in the future.
All accounting features appear in all of the accounts; these include the P&L report, receipt capture and tax estimate.
The Starter package is free for businesses with incoming funds of £0-£500 a month.
Standard is free for the first six months (£4.95 a month thereafter) for funds of £500-£4,000 a month.
Premium is also free for the first six months (£9.95 a month thereafter) for businesses with incoming funds of over £4,000 a month.
Compare Countingup with Know Your Money
From currency exchange bods, FairFX, Fair Everywhere lets you send and receive payments all over the world.
Get access to three currency wallets: GBP, USD, EUR, with a currency conversion fee of 2.5pc.
It’s a fine account if you’re a bigger spender. Up to 8pc cashback on any card spending with over 50 major UK high street retailers (discounts only available in-store).
All types of small businesses, sole traders and partnerships can apply – and they can link as many cards to the account as you like for employees.
There’s no doubt that this is a pricey account, though. You’ve got a minimum monthly charge of £12.50 with a £55 application fee.
Holvi is geared at freelancers and small business owners. It’ll work anywhere where MasterCard is accepted.
Send invoices from your phone – synced with your account – and find out when invoices are paid with instant notifications.
What’s more, you can share documents with your bookkeeper, upload receipts, add VAT and create account reports for easy bookkeeping.
It comes with a business current account for entrepreneurs which has features of a traditional bank account.
To apply you’ll need to be a more established company as sign-up requires ID, company registration number, VAT number (if applicable) and registry extract from Companies House. A sole trader only needs the ID and the VAT number.
Both the free and the Basic account (£9 a month) come with a business current account and a business Mastercard, bookkeeping prep and unlimited free bank transfer within Europe. The Basic account also allows you to create, send and track invoices.
CardOneMoney (formerly CardOneBanking) is more old school. It uses text alerts to confirm when money is in your account and to confirm that bills have been paid. Use text messages to check your balance too.
The account is aimed at sole traders, limited companies or partnerships who have a turnover of up to £2m.
Add up to four additional prepaid corporate MasterCards which will link to your business account. You can also export statements to a cloud accounting network.
Just be aware that this one isn’t covered by the Financial Services Compensation Scheme either.
It’s £12.50 a month with a £55 application fee.
Compare CardOneMoney with Know Your Money
Monzo doesn’t have a business bank account offering right now, but it’s looking to introduce one in future. You can register your interest on their website here.
Of course, the right bank account will depend on the needs of your small business. Factor in how many employees you have, your turnover and what features will support you in the day-to-day running of the firm. Whether you choose one as your primary account or a secondary account, digital banking platforms offer up a quick and convenient alternative to contend with your high street bank.
Related: Challenger and digital banks secure new funds to help small businesses