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Monzo business account review
Challenger bank Monzo is set to launch its brand new business account. Here's what we know so far.
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What's in this review?
After Revolut and Starling got into business banking in 2017 and 2018 respectively, it was just a matter of time before Monzo did the same.
In February 2019, Monzo launched its first 100 business accounts. We’ve gathered what we know about it so far and will keep updating the page as soon as new information comes in.
When is Monzo launching its business account?
In late 2018, Monzo announced that it would start providing banking services for businesses, and in February 2019 it started the trial of the first 100 accounts.
At the moment we don’t know much about what’s going to happen now and when business accounts are going to launch officially. Monzo hasn’t given a detailed roadmap of how things are going to develop.
It has said that it hopes to roll out more business accounts by the end of 2019 but hasn’t clarified whether we can expect them to be fully operative by then or just see a larger trial begin.
Much will also depend on the RBS funds Monzo is applying for and whether it gets the money or not.
What are these RBS funds exactly?
In 2009, at the height of the financial crisis, banking group RBS (Royal Bank of Scotland, which also includes NatWest) was bailed out by the UK government in order to avoid bankruptcy. In return, RBS had to set aside £700 million to give away to other banks who provide business banking to small and medium businesses (SMEs), with the purpose of enhancing healthy competition and reducing RBS’ market dominance in the field.
The £700 million have been divided into two different pools, from which Monzo is applying for funds:
- The Incentivised Switching Scheme. Banks who get the money can use it to give bonuses to SMEs who switch away from RBS. Monzo is among the banks who have qualified for the funds and is in the running to win part of it.
- The Capability and Innovation Fund. This money can be used to develop or improve business banking products. Monzo says it’s still working on the application for it.
If Monzo gets the funds, it says it will launch its business accounts sooner – otherwise, this will turn into a more long-term project.
How will Monzo’s business account work?
At this point, you’ll probably have guessed that we don’t know yet. What you can do for now is head to Monzo’s website and fill in a form to register your interest.
You’ll be asked about your business, what it does, its annual turnover and how long it’s been around. If you’re happy to be considered for the trial run, say so and Monzo might get in touch and offer you a business account before they’re fully launched to the general public.
As far as general intentions go, Monzo says it’s trying to build business accounts that don’t just look at the annual turnover of a business, but also take into account at which point the business is at in its life – it may be young but growing fast, or small but stable, and so on.
Monzo says it will try to target its accounts’ features accordingly, but we’ll have to wait and see what this means in practice.
Monzo business account fees
If you already have a personal account with Monzo, you’ll know that almost all its services and features come for free. However, it’s unlikely that the same will be true for business accounts.
Free business banking doesn’t really exist in the UK, with the vast majority of institutions charging a monthly fee for it. At the moment, Monzo basically only charges for overdrafts, so it makes sense that it would be looking for new ways to make the company profitable. The Sunday Times reported that Monzo will charge a small fee for its business accounts, and all the hints seem to point in that direction.
As soon as we know more about it, we’ll update this page. You’ll be the first to know, we promise.
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Updated February 24th, 2020
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