In 2017 we covered the launch of the Tide business account with an overview of the then newly launched service. At the time Money Saving Answers opened an account to test its features. Since then the account has seen minimal activity, and that's a shame because a lot has changed over the past 24 months.
What is Tide?
Firstly, for those not in the know, Tide is a digital business ‘bank‘ account with a specific focus on small business, freelancers, and those needing to separate their business and personal finances.
One of the main initial draws to Tide is its fee structure. Traditional business banking can be expensive, banks charge a monthly fee to keep the account then additional fees for various transactions.
The thinking behind it is that these are just regular business costs, but that acts a barrier to those just starting out, or testing ideas.
The beauty of the Tide account is that it's completely free to open an account, then just 20 pence per transaction. Though ATM withdrawals do cost more.
The account was in its infancy when we first covered it. Since then Tide has grown to over 100,000 business customers giving it a similar market share to TSB and CO-OP. Recently the company invested in a national advertising campaign to increase awareness. More interestingly though it has added and updated a number of new features.
There are a number of services now that allow business owners to scan and upload receipts into their banking or account apps. Where Tide's new offering stands out is not only does it use optical character recognition (OCR) to turn paper receipts into digital ones, but it also attempts to digitally match those receipts to transactions in the account.
Earlier in 2019 Tide added multiple account support to the app. This allows up to five accounts to be linked within the app. The idea behind it is to make it easier for entrepreneurs to test new business ideas, and run multiple side-projects.
Something that every traditional bank has as standard was sorely missing from Tide in the early days. Whilst electronic payments might be the future the inability to deposit cash would have ultimately pushed some potential customers away.
That has now been taken care of with the over the counter services at Post Office branches and Paypoints. The former will cost £1 per deposit and the later 3% of the deposit value.
Deposits are limited though to the tune of £500 per day. Whilst I'm sure there is a perfectly good reason, it does seem a bit sneaky that to deposit £1000, you'd have to not only make two visits but also pay the deposit fee twice.
Subscription service and free legal support
When the account launched we questioned whether the 20p transaction fee would work, and felt that it would heavily depend on the type of businesses Tide could attract. Those making a large number of digital transactions would ultimately end up subsidising those making fewer but higher value transactions.
Tide has looked to add an additional revenue stream through the introduction of Tide Plus. The Plus account includes an exclusive matte black debit card (for those that care about such novelties), a 24/7 legal helpline, prioritised in-app messaging support and the company says more features are in development.
FreeAgent and Quickbooks Integration
Whilst Xero is arguably more popular in some circles, We've always liked FreeAgent (get 10% off with this link). Integration for this was missing (Xero was available at launch) during the original overview of Tide. It was later added in a somewhat limited way, but I'm now happy to say Tide has full integration with FreeAngent for automatic bank feeds.
And for those that prefer, Quickbooks Online integration has also been added giving close to realtime updates on payments, transfers, and cashflow.
Some of the same drawbacks are still there
The one question Money Saving Answers gets asked more that than any other when it comes to banking is “does it support ‘International payments/transfers?” Unfortunately you still can't sent payments abroad via Tide unless you opt for their new International Currency Account, which hasn't fully rolled out yet. This is unfortunate since digital competitors Starling and Revolut have had this covered for a long time now. Two years on Tide is still operating in a UK only space, though it has recently opened a Bulgarian office.
Faster payments are still slow. Tide has access to the Faster Payments system. Yet moving money into or out of the Tide account takes a little time. Okay we're not talking the days it used to take before Faster Payments, more like a an hour or two, but being able to move money from a Santander account, to a Nationwide account, then into a Starling account, all near instantaneously, is the type of service people have now accustomed too.
Tide processes its payments in batches. These run every 30 minutes, but clearing takes up to 2 hours. This has been reduced from 4 hours previously, but it is still longer than most will be used to with practically any bank.
Is the Tide business account right for you?
Essentially that is all going to boil down to the type of business you are running. For those making and receiving online payments then it seems like a winner, but with the caveat that international transfers aren't catered for. That rules out Amazon UK Affiliate receipts (an IBAN is needed), though most other online payments systems will work fine, and for those operating solely within the UK of course it shouldn't be an issue.
Cash-based businesses forget it. As much as you might want to jump into 21st century, Tide just isn't there yet. Despite the recent addition of cash deposits, better rates can often be had from the traditional banks. That being said, for new start-ups and mirco-businesses handle cash, then Tide could still work for you.
For everyone else, even those that already have a traditional account, Tide is a good alternative, or even a second account. The barrier to entry is low in terms of cost (free) and time (about 5 mins), it's generally a pleasure to use, and new features and improvements are regularly being added. Why not give it a shot? You can now sign up for a Tide business account online