Leading digital bank challenger Cashplus has been granted a full UK bank licence by the Prudential Regulation Authority with immediate effect, making it the UK’s newest bank whilst being one its oldest challengers.
Headquartered in London Cashplus has been offering banking accounts and services to small and medium sized businesses since 2005. With its new banking licence Cashplus can now use part of its £500m of customer deposits for lending and aims to provide £1bn of credit to UK small businesses to support the UK’s post-Covid-19 recovery.
Like other digital banks, Cashplus offers prepaid Mastercards and current accounts to its customers and has long been a favourite of micro-businesses and entrepreneurs who are typically underserved by traditional banks, especially those with poorer credit histories.
Whilst other digital challengers go about their business with much fanfare, Cashplus has taken a disciplined approach to growth. Quietly and steadily developing its services, and generating c.£50m in revenues in 2020 and, is still one of the only digital challengers to record consecutive years of operating profit.
Founder and CEO Rich Wagner said: “Cashplus has reached this milestone at the moment when UK small businesses need us most. When we started out 15 years ago, we got first-hand experience of the pain that small businesses face when dealing with big banks.”
Taking full advantage of its new banking licence Cashplus now hopes to attract existing business customers from competitor banks with innovative small business focused features, including payment tracking tools, significant savings on essential services such as payment processing – where it already offers savings of up to 50% over high street rivals through its Payment API product – and integration with all major accountancy platforms.
“We are manically focused on what customers really need. We don’t go in for gimmicks or flashy functionality for the sake of it. Instead, we look at simple, effective products with honest and transparent pricing.” Wagner added.
Whilst its account services remain its most popular product, Cashplus is also an established lender with total lending of over £640m and uses advanced data techniques to support its underwriting capabilities.
Rich Wagner said: “Where some firms have burned through piles of cash in the pursuit of growth at all costs, our disciplined approach and positive product economics mean that we can grow with confidence. Now we’re a bank, there is a tremendous amount of potential waiting to be unlocked.”
Cashplus currently serves 7% of all new UK businesses and, as company formations hit record monthly highs during the Covid-19 crisis, Cashplus expects to grow its share of this market to at least 10% within the next three years.”