We compare the two leading card based business ‘bank' accounts, CashPlus, and CardOneBanking. Whilst they might seem similar on the surface, there are some key differences. Which one is right for your business?
UPDATE: CashPlus has now applied for a banking licences. Once granted it will become a fully fledge bank
Card based ‘bank' accounts are on the rise, and as they continue to enhance their proposition with the addition of new features, they're starting to rival traditional business bank accounts, especially for startups and small businesses.
The popularity of these accounts is in part, based around the fact they don't require any credit checks. That makes them quick and easy to open, and attractive to those who's poor personal credit history is preventing them from opening a business bank account.
That being said, they're not just limited to those with an adverse past. Over the past few years record numbers self-employed has risen to over 4.6m. For some that means the formation of a limited company, for others it means a partnership, a sole trader, or even a social enterprise, either way there is usually a need to separate personal and business finances. It's here where card based accounts excel, providing a popular alternative to a traditional business bank account, for contractors, consultants, tradesman, hairdressers, beauticians, and many others.
The fact that you can get your account set up and ready to take payments within 24 hours is also a large part of the appeal. In this regard the so-called ‘challenger' accounts can be a useful stop gap whilst pursuing a more traditional business account or when proving your business concept.
While there's no shortage of card account options available for personal use, when it comes to business banking it's whole different proposition.
CashPlus, and CardOneBanking are the two leading leaders in this field and while they might appear similar, their propositions are entirely different. We've already taken a look at each of these accounts individually, but we've never done a direct comparison, so here it is.
How do they compare
|CashPlus||Card One Banking|
|Application fee||Free||£55 (refunded if unsuccessful)|
|Cover charge||£69 annual fee||£12.50 monthly|
|ATM cash withdrawal||£2||£1.50|
|Counter cash withdrawal||£3||£3.50|
|Point of sale payment||Free||Free|
|Standing orders||£0.99 (first three payments each month are free)||£0.30|
|Other online payments||£0.99 (first three payments each month are free)||£0.30 (£7.50 for faster payment service)|
|Counter cash credit||£0||0.75% (50p minimum)|
|Counter cheque credit||N/A||0.75% (50p minimum)|
|Receive international payments||Yes – call customer services||Yes|
|Maximum single load (on card*)||N/A||£1,250|
|Maximum balance||£15,000 maximum pay in per day. Max balance negotiable||£50,000 (account), £5,000 (on card)|
* This is the maximum you can move from your main account pool on the card itself at any one time.
CashPlus Business Account
At first glance, the CashPlus business account presents itself as the most attractive product. It's certainly the most mature and has over 1 million UK customers. APS, the company behind the product has been issuing card-based accounts for over a decade.
The annual fee of £69 compares well with charges made by conventional banks (e.g. Barclays charge £6.50 per month, equivalent to £78 per year), and it doesn't have to be paid up front either. The main drawback is that you can't pay in cheques. It's also a little more work to receive international payments as you'll need to call customer services for help with that.
More recently APS signed a deal with the Post Office to become the first financial technology company to offer services through its network. This allows CashPlus customers to make deposits and withdraw funds over the counter, as well as making balance enquiries.
Continuing this line of ‘firsts' CashPlus has also become the first fintech company to provide bank feed integration with Sage.
CardOneBanking Business Account
The CardOneBanking business account is a slightly newer product. The monthly cover charge is higher, though charges for other services are similar. It also offers slightly more convenience and flexibility for your money in the ability to accept and pay in cheques, receive international payments, and use Barclays branches in additional to the Post Office network. Though at the Post Office you'll need a CardOneBanking Giro book which is charged for.
Compared to CashPlus this is more of a managed account with funds split between billing, where you can hold up to £50,000 (secure at Barclays), and spending, which is the money you load (a maximum of £5,000) onto the card. Be careful here, as while moving funds from the billing part of the account onto the card is free, there is charge when moving funds in the opposite direction.
Only you can decide which account is right for your business, though if you know that you need to accept cheques as payment, then your choice is limited. If you can accept online payments and/or cash, then the Cash Plus account looks to be a slightly better deal at the moment. Of course your mileage may vary, but with the recent announcement that CashPlus is to become bank, it looks like the better bet for the future.
Do you have experience with either of these accounts? We'd love to hear your thoughts. Please leave a comment below.