Starting a small business in the UK is an exciting journey, but choosing the right banking partner is crucial to managing your finances effectively. Challenger banks like Wise, Revolut, Monzo, and others have revolutionized business banking with their digital-first approaches. This guide will help you compare the top options based on key business criteria such as ease of use, costs, multi-currency functionality, customer service, accounting integrations, and additional features.
Key Criteria for Choosing a Challenger Bank
Before diving into the comparisons, here are the factors we’ll evaluate:
- Ease of Use: How intuitive and accessible the platform is.
- Costs: Account fees, transaction charges, and hidden costs.
- Currencies: Support for multiple currencies and exchange rates.
- Customer Service: Availability and responsiveness.
- Accounting Features: Tools or integrations for bookkeeping.
- Other Features: Unique offerings such as expense management, virtual cards, or loan facilities.
1. Wise (formerly TransferWise)
Overview
Wise is renowned for its low-cost international money transfers and multi-currency accounts, making it an excellent choice for businesses dealing with international clients or suppliers.
Features
- Ease of Use: User-friendly app and desktop interface.
- Costs: No monthly account fees. Transaction fees start at 0.4% for currency conversion, with no hidden markup on exchange rates.
- Currencies: Supports over 50 currencies, enabling businesses to hold and transact in multiple currencies.
- Customer Service: Email support and an extensive help center; limited phone support.
- Accounting Integrations: Syncs with Xero and QuickBooks.
- Other Features: Batch payments, local account details for USD, EUR, GBP, and other currencies, and real-time exchange rates.
Best For
Businesses with significant international transactions.
Learn more about Wise Business Accounts
2. Revolut Business
Overview
Revolut Business is tailored for startups and small businesses looking for versatile banking and financial management tools.
Features
- Ease of Use: Sleek app with a focus on financial insights.
- Costs: Free plan available. Paid plans range from £25/month (Grow) to £100/month (Scale), offering additional allowances and features like unlimited international payments.
- Currencies: Holds and exchanges 30+ currencies at interbank rates with a small fee for conversions beyond free allowances.
- Customer Service: Priority support for premium users; standard support is less responsive during peak hours.
- Accounting Integrations: Integrates with Xero, FreeAgent, and Zapier.
- Other Features: Multi-user access, expense management tools, virtual cards, payment approval workflows, and open banking APIs for custom integrations.
Best For
Tech-savvy businesses that need scalable plans.
Explore Revolut Business Accounts
You were invited | Revolut United Kingdom
3. Monzo Business
Overview
Monzo Business offers intuitive banking tailored for freelancers and small businesses, with a strong emphasis on financial clarity.
Features
- Ease of Use: Highly intuitive app design with real-time notifications.
- Costs: Free Lite account or £5/month Pro account, which includes invoicing and multi-user access.
- Currencies: Primarily GBP-focused, with limited international capabilities and no direct currency exchange features.
- Customer Service: In-app chat with fast response times.
- Accounting Integrations: Connects with Xero, QuickBooks, and FreeAgent.
- Other Features: Tax pots for setting aside VAT or tax, integrated invoicing, and detailed cash flow analytics.
Best For
Local UK businesses with straightforward banking needs.
Discover Monzo Business Accounts
4. Starling Bank
Overview
Starling Bank is a top choice for UK-based businesses seeking a no-fuss digital banking experience with powerful tools.
Features
- Ease of Use: Highly rated app and desktop functionality.
- Costs: No monthly fees for the basic account. Additional features like Euro accounts (£2/month) or USD accounts (£5/month) are available.
- Currencies: Supports GBP, EUR, and USD with dedicated multi-currency accounts.
- Customer Service: 24/7 UK-based support via in-app chat or phone.
- Accounting Integrations: Works seamlessly with Xero, QuickBooks, FreeAgent, and Sage.
- Other Features: Overdrafts up to £150,000, business loans, instant payment notifications, and tools for invoice management.
Best For
UK-focused businesses looking for a cost-effective solution.
Find Out More About Starling Bank
5. Tide
Overview
Tide specializes in serving small businesses with quick setup and practical tools.
Features
- Ease of Use: Quick account setup and easy navigation.
- Costs: Free accounts available. Paid plans start at £9.99/month for features like priority support and unlimited invoicing. Card transactions within the UK are free, but cash deposits cost £1 at Post Offices.
- Currencies: GBP-focused with no multi-currency support.
- Customer Service: In-app support available, but response times can vary.
- Accounting Integrations: Links with Xero, FreeAgent, and Sage for automated bookkeeping.
- Other Features: Expense tracking, invoice templates, scheduled payments, and access to small business credit options.
Best For
Small businesses prioritizing speed and simplicity.
Explore Tide Business Accounts
Detailed Comparison Table
| Feature | Wise | Revolut | Monzo | Starling | Tide |
|---|---|---|---|---|---|
| Ease of Use | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐ | ⭐⭐⭐⭐⭐ | ⭐⭐⭐ |
| Costs | No monthly fees; low FX fees | Free-£100/month | Free-£5/month | Free basic; add-ons extra | Free-£9.99/month |
| Currencies | 50+ currencies | 30+ currencies | GBP only | GBP, EUR, USD | GBP only |
| Customer Service | Email-focused | Priority for paid plans | Responsive in-app chat | 24/7 UK-based support | Variable response times |
| Accounting Features | Xero, QuickBooks | Xero, FreeAgent, Zapier | Xero, QuickBooks | Xero, FreeAgent, Sage | Xero, Sage, FreeAgent |
| Unique Features | Batch payments, real-time FX | APIs, expense mgmt | Tax pots, invoicing | Loans, overdrafts | Credit, scheduled payments |
Accounting Software Comparison
| Software | Supported Banks | Features | Pricing | Customer Service | Ease of Use |
| Xero | Wise, Revolut, Monzo, Starling, Tide | Automatic reconciliation, VAT tracking, and invoicing | From £14/month | 24/7 support via chat | ⭐⭐⭐⭐⭐ |
| QuickBooks | Wise, Revolut, Monzo, Starling | Payroll management, tax estimates, and reports | From £12/month | Chat and phone support | ⭐⭐⭐⭐ |
| FreeAgent | Revolut, Monzo, Starling, Tide | Cash flow insights, invoicing, and tax filing | Free with certain bank accounts | Email support only | ⭐⭐⭐⭐ |
| Sage | Starling, Tide | Inventory tracking, advanced reporting | From £12/month | Phone support | ⭐⭐⭐⭐⭐ |
| Zapier | Revolut | Workflow automation for custom integrations | Free to £49/month | Online resources | ⭐⭐⭐⭐ |
Recommended Accounting Software
Xero is the top recommendation for small businesses due to its comprehensive feature set, ease of use, and seamless integration with most challenger banks.
Recommended Bank
After thorough comparison, Starling Bank stands out as the best overall option for small businesses in the UK. It offers a well-rounded feature set, no monthly fees for basic accounts, multi-currency support, robust accounting integrations, and 24/7 UK-based customer service.
- Why Choose Starling?
- Cost-effective with no hidden fees.
- Flexible options for multi-currency accounts.
- Excellent tools for accounting and bookkeeping.
- UK-based support available around the clock.
For businesses with specific international needs, Wise is an excellent alternative due to its unmatched low-cost international transfers, real-time exchange rates, and seamless integration with accounting tools like Xero and QuickBooks.
Conclusion
The best challenger bank for your business will depend on your unique needs:
- Choose Wise if your business has frequent international transactions.
- Revolut Business is ideal for tech-focused companies seeking advanced financial tools.
- Monzo Business works well for freelancers and local businesses with basic requirements.
- Starling Bank offers excellent all-around functionality for UK-based businesses.
- Tide is perfect for small businesses prioritizing fast setup and simplicity.
Take your time to explore the features of each option and choose the one that aligns with your business goals.
FAQ Section
- Are challenger banks safe for business accounts? Yes, most challenger banks like Starling and Monzo are regulated by the Financial Conduct Authority (FCA) and offer FSCS protection.
- Can I switch between plans later? Yes, most banks like Revolut and Tide allow flexibility to upgrade or downgrade plans as your business grows.
- Do these banks offer credit or loans? Some, like Starling and Tide, provide business loans and credit facilities.
For more detailed comparisons and insights, visit each bank’s website through the links provided. Don’t forget to share this guide with fellow entrepreneurs to help them make an informed decision!
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