In our quest to find the best business bank account alternative we've looked at Cashplus, CardOneBanking, and Acorn, but now there's a new account on the scene courtesy of fintech startup, Tide.

What is tide?

Tide is an alternative ‘bank' account aimed at small businesses, freelancers, and independents.
We usually refer to these accounts as being card-based due to the way they work, but in the case of Tide, mobile first, or app-based might be more correct.

In true challenger bank style, the Tide account is based around a smartphone app. And while other popular alternative business accounts also enjoy banking apps they aren't necessarily as central their proposition.

In Tide's case, the app is everything. It is the account. You won't find any traditional online banking, costly customer service numbers, or frustrating login procedures. The account is run and managed solely within the app. Customer service also comes via the app, though you can of course email too if needed.

How does it work

The beauty of the Tide account is in it's simplicity. Basically just download the Tide app here and follow the on screen prompts.  Account application takes less than 5 minutes, and all being well you'll have your sort code and account number sent to you a few minutes later.

In our tests there was a slight issue verifying the ID we used, but we still had our account details within a couple of hours, while the Mastercard came within three working days.

Payments to and from the account can be made immediately, but direct debits can take a few days to setup. Unlike some other card-based accounts, there are no split pools. The money in your account, is in your account. There's no need to split funds between the account and the card, they are one and the same.

How much does it cost?

Here's the real boon. The Tide account costs just 20p per transaction. That's it. Well almost it. There's a £1 ATM fee, but that's all.  No monthly cover charges, no hidden fees, just 20p per transaction, and not even on all transactions. If you can receive payments via BACS rather than Faster Payments, then there's no fee at all.

How long that remains sustainable is going to depend on the type of businesses that Tide attracts, and how they use the account. However, should anything ever happen to the company, your money/your business' money is safely ring-fenced at Barclays.

What can you do?

You can use the account like you would any standard bank account to make and receive electronic payments, to setup direct debits, and standing orders, to make card payments, and to transfer money.

Additionally, you can also send and manage invoices directly from the app, and use the card abroad at point of sale, or online, without incurring any foreign exchange fees. For the ultra tech savvy, Tide also has an API for hooking up your account data to external services. Integration with accounting favourite Xero is available right out for the box, with but as of yet there is still no FreeAgent integration. That's a shame as the latter is often preferred by micro businesses and sole traders as tax returns can be filed directly within the interface.

What can't you do?

Here's the crux. You can't pay in cash over the counter (at the Post Office or anywhere else), you can't receive cheques, nor can you make or receive international payments (yet). And while we loved the app, it is the sole means of accessing and administering the account. That won't suit everyone, particularly those used to more comprehensive online banking platforms. That being said, there is a web-based portal that features the same functionality as the app, but you need the app to access it.

Unfortunately, if you lose your phone, you are stuck. You can email Tide, to get your account frozen and your card cancelled, but you're locked out of the app until you get a another smartphone. Compare that with other accounts, that offer full online and telephone banking services that can be used in lieu of the app.

Pro's

  • Cost effective
  • Instant sign-up (roughly 3 minutes)
  • No credit checks
  • No foreign exchange fees, commission, or loading
  • App-based
  • Fast customer support
  • Integration with Xero

Con's

  • No international payments (yet)
  • Totally app based (great for those who live on their mobile, but perhaps not so good for others)
  • No cash payments
  • Cannot accept cheques (yes, some companies still use them)
  • No account access if you lose your phone
  • Faster Payments seem slow to show up in the account
  • No integration with FreeAgent

Our verdict – It's a no-brainer (almost)

The Tide account is a welcome alternative to traditional business bank accounts, and even to the usual card based alternatives, but it's not for everyone.

It's simplicity and ease of use, makes it perfect for micro businesses that need basic account and need it quickly, while the lack of credit checks, and ease of application make it a great proposition for those with credit history. Typically, such users would struggle open a traditional business bank account, and instead turn to the likes of CashPlus or CardOneBanking.

That being said, the account does have some limitations. We are aware that it is still early days so to speak, and many more features are on its road map for 2017 and beyond, but until they make it into the account we can't count them.

The inability to pay in cash over the counter, means it's a complete non-starter for cash-handling businesses, and something that ought to be addressed when it is considered that 49% of the UK economy is still cash based.

Similarly, not being able to accept international payments, or cheques, could also present a problem.Cheques especially, are going to make something of a comeback now that new rules mean that from 2018 they should clear within a day. Managing the account solely via an app my put off some, but could be seen as a plus for others.

This area of the fintech industry is beginning to get crowded as more challenger banks open up for business, and traditional banks start lifting their game. But, with it's unique approach, and simple payment structure Tide is step in the right direction. It will be interesting to see how it develops as the competition heats up.

If your business fit's within the accounts limitations, then it's a no-brainer. At 20p per transaction, it is possibly the most cost effective business bank account around, and depending on your business could work well as a main or even back-up account.

Update: Although this article is about the Tide account, it is worth mentioning, that Cashplus recently announced its application for a banking licence. Obtaining the licence will take a little time, but opening a Cashplus account now, could provide a back-door method of obtaining a fully fledged business bank account without any additional credit checks. 

8 Comments

  • Nick Rees

    Front camera has a crack across it and it wont let me take selfie with normal camera, shame everything was going great till then,

    • Carl Michael

      This is one of the problems with these mobile-first accounts. If you have a phone problem you are locked out. Compare that with a traditional account, where you can use telephone banking, or pop into a branch (in the worst case scenario). Still, these are more one-off events.

      We’re currently testing Starling (personal account), and it not only requires a photo of your photo ID, but also that you record a video of yourself saying some kind of daft phrase.

  • Simon

    Cheap isn’t always cheerful. Moved to Santander business banking after my Tide app lost its verification (on the same phone BTW) due to Tide’s back end server issue last week and I lost access to my entire business funds.

    Reverification was by taking a picture (I always carry my face) but also needed me to scan a passport into the camera, if I’m away on business in the UK I don’t carry my passport around so when away from home domestically I cant reverify.

    Tide seems experimental and I wasn’t happy with my business being used as a guinea pig so closed my Tide account.
    Santander have amazing customer service, and opened my business banking online in less than an hour, so I’m not sure that Tide claim that they’re beating high street banks with instant accounts really stands TBH.

    Banking is based on trust, and I just don’t trust Tide with my funds.

    • Carl Michael

      This is one the things I point out when talking about these mobile-first accounts (Tide, Monzo, Starling etc…) if you lose your phone, or have some sort of issue you’re stuck. No online banking or telephone banking as a back up. Most even run customer service through the app too. They will get there eventually.

  • Rowan Ling

    The app is full of bugs and if you need to contact customer service – because of the bugs – you have to use the direst of in-app messaging systems and even if you repeatedly ask them to phone you they WILL NOT!
    Signing up to this service will put your business at risk – think lost revenue, unhappy clients and bankruptcy.

    I would rather invest in mortgage-backed securities and collateralized debt obligations than give my money to Tide!

    Run before the Tide comes in!

    • Carl Michael

      Harsh words from Rowan, but criticism is how these challengers get better. The recent outage won’t have gone unnoticed either.

      This market space is getting interesting, especially now that CashPlus has announced its application for a full banking licence.

  • Andrew Black

    Interesting development – Has anyone tried using the app from an android emulation on a PC? or a second Mobile?, or is the App locked to a single device for acess to the account?

  • jo

    I am currently finding problems with receiving standing orders . One out of three has succeeded
    Not impressed my first business bank account and think I shall leave

Leave a Reply

Your email address will not be published. Required fields are marked *