This Monzo review is for the two versions of the business account, not for the personal current account of Monzo.
If you're in search of a business bank account with strong online banking features in the UK, you may have heard of Monzo.
With over 5 million registered users in Great Britain* Monzo is one of the most popular challenger banks in the market.
In this article, we will explore the features and benefits of the Monzo Business Bank Account to help you decide if it's the right choice for your business.
We will detail all the features, eligibility conditions, monthly fees, and other fees to help you understand their products thoroughly.
Monzo Business Account offers competitive pricing with low fees for foreign transactions along with a Pro version that includes six months of free use of Xero accounting software.
Monzo Business Account offers useful features such as tax pots for setting aside money owed to HMRC and automatic categorization of transactions to help monitor your spending.
Monzo Business Account provides payment flexibility of up to £25,000 per day in-app, while offering instant access savings pots with 3% AER interest (variable) a year.
What is Monzo Bank?
Monzo was founded in 2015 by a team of former Starling employees. The company, headquartered in the UK, originally started its operations through a mobile application and prepaid debit cards.
In 2017, its banking license restrictions were lifted and Monzo became able to offer a full current account * to its customers and subsequently developed an offer of current accounts for businesses.
That means the bank is regulated by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA)
Though it holds a banking license in the UK, Monzo is different from your traditional high street banks.
Before you open any Monzo account, it's important to note that accessing and using your Monzo business current accounts is primarily done through the mobile app, a pc or tablet access will only grant you limited features.
What do Monzo's Business Accounts offer?
Monzo's bank accounts are located in the UK and denominated in GBP. Unfortunately, they don't offer multi-currency accounts at the moment.
However, the business accounts of Monzo offer a wide range of functionalities that are very useful to help your business manage business finances.
1. Business Accounts
There are two types of business accounts with Monzo, which we will detail below:
The Monzo Lite
Despite being the basic version of the business account, it comes with a wide range of features making it a very attractive option for sole traders. We have highlighted below the most useful ones for a business:
- A Physical business debit card: This is automatically available to all users and can be used
- Option to freeze and unfreeze your card: The "unfreezing" of your card is what Monzo calls "Defrost" on the Monzo app.
- Access through Web and Mobile: While Monzo started as a purely mobile bank, it now allows web access to clients' business accounts.
- All-day-round customer support: There will always be someone to answer you, be it by chat, phone, or email, depending on the day and hour.
- Generation of Payment Links for customers: A hassle-free way for your clients to pay you.
- Online Card payment through Stripe: A Monzo business account is able to accept online card payments thanks to the partnership the bank has with Stripe. This is a very efficient way to ensure customers are at ease when paying you on your Monzo account.
- Access to Apple Pay and Google Pay: Through the above-mentioned partnership, they forged with Stripe.
- Instantaneous and free bank transfers within the UK: Sending money to bank accounts in the UK has never been easier.
- Easy Bank Transfers (free until 2024) within the UK *: Enabling direct payments from their bank accounts by customers, without having the details typed in.
- "Pots" to divide the money by usage categories: Categorizing your spending within your bank account will help you to better understand and manage your cash flows.
- Digital Receipts: Create and store receipts. Traceability as you need it.
- International Transfers to 70+ countries, powered by Wise: Giving an international dimension to your business account.
The Monzo Pro
This is the more elaborate version of the business account and includes all the above features plus some more that will considerably smooth over the running of your company through Monzo:
- Automatic allocation of funds to a "tax pot": Save money for tax, so you're sure you won't be short when you need it.
- Integration with Quickbooks, Xero, and FreeAgent: Integration with your preferred accounting software is a welcome addition to a business toolkit.
- Discount offer for Xero subscription *: Through a partnership, the two companies crafted the Pro Monzo business account.
- Virtual Cards: You can allocate to each "pot" you have created for better tracking of your spending.
- Built-in invoicing system: Easily created from the app and with automatic change of status when your customer pays you. Centralizing your invoice management within the same app handling
- Multi-user access (for Limited companies only)
Of course, both of these options come with the "standard" Monzo account features such as:
- Current account switch service: Allowing you to switch effortlessly from your old bank account to your new Monzo business bank account.
- Payment Scheduling: Schedule and keep track of your scheduled payments. All are centralized in one app.
- Protection of your funds under the Financial Services Compensation Scheme (FSCS) *: Up to £ 85.000 for eligible accounts.
- Possibility to pay in cash (using PayPoint) and cheques. Deposit money onto your Monzo account at shops displaying the PayPoint logo (you will need to have your card with you!).
- Customer Support is available 24/7: Monzo's customer services will always have a way for you to reach them, through the app, by phone, or by email.
- Elaborate security (payment approval, card freezing, required identification)
- Lastly, it is important to note that overdraft facilities are not available for any Monzo Business accounts. Indeed, this is exclusive to the Monzo personal current accounts.
2. Monzo's Cards
Monzo started as a payment card provider and its coral-colored card (offered to all individual current account owners) instantly gained recognition.
Monzo's debit cards are powered by Mastercard, so they are supposed to work anywhere where their cards are accepted.
The cards are denominated in GBP only.
Spending with the cards is automatically archived and categorized (Bills, Charity, Groceries, Family, etc.). The automatic categorization is well efficient but even if an expense gets mislabeled, it is easy to modify it within the app.
If you have the business lite account, you only get 1 physical card (pebble grey or slate grey color), but the Premium account comes with virtual cards, that you can link to your different pots, thus more easily managing your spending.
The card comes with free ATM withdrawals and without limits in the UK. However, there are fees attached to overseas ATM withdrawals, which are discussed in the next section.
3. FX and International payments
As stated above, Monzo's accounts are, at least for now, denominated in GBP only.
However, you are able to make international transfers to 80 countries using your account. Indeed, Monzo has partnered up with Wise to offer this, which means Monzo uses Wise's banking infrastructure to send your money abroad.
Sending money abroad:
You simply select the "payment tab" and choose "transfer internationally", enter the payee's details (which you can save for further use), and validate the transfer.
Receiving international payments:
To receive international payments is not as smooth as Monzo is not connected to the SWIFT and SEPA banking networks.
In order to receive payments, you will need to use an IBAN generator and use it as the bank account details to receive the money.
You can do this for any currency but this method is not very reliable, might take a few days, and Monzo will not be able to track the payment if any issue arises. So please be warned before using Monzo.
Pros and cons of Monzo Business Accounts
Monzo Business Account offers a range of features for both personal and business banking, inside and outside of the United Kingdom. Let's take a look at the pros and cons that you should consider.
- Monzo for business offers flexible account options with the Pro and Lite plan. The company provides basic features in both packages, including multi-user access, easy bank transfers (valid until 2024), virtual cards, and more.
- Monzo provides its business account users with 'personal loans for businesses' making it convenient to access funding under any circumstances.
- 24/7 customer support from Monzo makes it convenient for users to get quick help or comprehensive assistance from dedicated staff.
- If you often work with cash, it can be a downside to choose Pro or Lite business accounts from Monzo, as there are fees for every cash deposit.
- Overdraft options limited to users may be a deal-breaker compared to other providers, as it is not flexible and may require more than a few overdraft options.
- No business credit card: Monzo business account may not be an ideal option for you as there is no business credit card option available.
Eligibility and requirements to open a business account with Monzo
You can sign up for a Monzo business account if you are a company, alas this comes with restrictions.
Indeed, at the moment you can open a business Monzo account only if you are a UK-based sole trader or if your company is an active limited company *.
The other criteria are:
- Status of the Company: The status of the company must be "active" on Companies House (CH).
- Company Director: There must be at least one person listed on CH as an active company director (of course, he or she must not be listed as "disqualified") on CH.
- Person of Significant Control (PSC): At least one PSC must be listed on CH (more on that later).
- Capital Structure: Corporate entities must hold less than 25% of the shares
- Revenue Source: Revenue must come mostly from the sales of goods and/or from providing services. It cannot be from interest or investment income. The company needs to be a tax resident in the UK only.
- Industry: Monzo cannot take on certain business types (such as Charities and Limited companies by guarantee) and companies working in certain industries (for example mining and quarrying, defense, and weapons) *.
❗Important: Monzo cannot onboard companies that are tax residents overseas.
How to apply for an account?
To open a business account you will need to start by downloading the app. Once this is done, start the registration process.
The steps only take a few taps but it requires some information and documents from you. You will need:
- Proof of your business address (bill, tax document)
- The company's registered name (for a limited company) or number
- The company's unique tax number
- A valid photo ID (national ID card, passport, biometric residence permit, driving license)
Before checking your identity
Monzo will inquire about your business to categorize you and tailor some of their offers to your profile.
To do so, they will ask questions about your company, its type of industry, its business address, its UK Tax ID number, the volume of its activity, how the business pays and gets paid, and if it has any overseas presence.
💡Tip: For Limited Companies, the UK Tax ID number can be filled out directly by Monzo from Companies House
It's the Identity check and the verification of the PSC (People with Significant Control) of your company.
PSCs, or "Beneficial Owners", usually are people who own or control a quarter or more of the shares in your company or a quarter or more of the voting rights in your company. Lastly, someone who has the capacity to designate or dismiss the majority of directors.
You can check the identities of your company's PSCs here *.
To register the PSCs with Monzo you will need to submit an accepted form of ID and provide the following information: Country of residence, date of birth, and email address (if by any chance, your PSCs have an existing account with Monzo, you can skip that step). An application with PSCs will be longer to process.
It generally takes between 1 to 4 weeks to open a Monzo business account as they need to carry checks on the information they have been provided with.
Monzo Customer Service
Monzo prioritizes their clients extensively.
With friendly, 24/7 human support, the company has a dedicated team of specialists to assist and answer your questions within the app itself, whenever you need help.
Unlike other online bank accounts, Monzo does not require you to make an appointment or open a case when you need support. Monzo customer service is proactive and will answer any questions you may have on the go.
Fees Charged By Monzo
They will be deducted from your account on the same day you opened your account.
|Business Pro Account||£5/mth|
Those are very low monthly fees and make Monzo an attractive option for businesses who want to maximize every penny they spend.
Fees for accepting online card payments through Stripe
You will be charged a fixed fee of £0.2 plus an additional percentage depending on where you card is from:
|Cards from any other place (including Google and Apple Pay)||2,9%|
Your Monzo card is free and you can have as many ATM withdrawals as you want in the UK.
However, if you withdraw money overseas, there are restrictions. This is a point you will want to factor in if you decide to spend abroad using your Monzo debit card *.
|Issuing a Monzo debit card||Free|
|Overseas withdraw limits||£200 for free every 30 days|
|Additional overseas withdraw||3% of the amount withdrawn|
|Easy Bank Transfer fee||Free until 2024
|Domestic Bank Transfer||Completely Free in the UK only|
All in all, we find the Monzo Business offers to be of very good quality: low fees, easy to use, and wide range of functionalities making it versatile and easy to use through a very well-designed Monzo app.
The fact the Monzo pro lite is completely free (including the free atm withdrawals) makes it a very attractive option for cash-strapped businesses in its infancy, while the Pro version comes with a monthly fee it is quite affordable and will make you save invaluable time and money.
The accounts are not without limitations but limited companies starting their business and needing solid business banking functions will definitely find what they need with the Products Monzo offers.
For example, you don't have access to financial instruments, you cannot contract a business loan, or you cannot earn interest on your balance, thus missing out on the final rising interest rates across the world.
And don't forget: Monzo's core product remains their personal account! So check this as well!
We hope you enjoyed our Monzo review and it helped you to compare business bank accounts from this promising challenger bank with its competitors!
And if anything is missing in this Monzo review, drop us a message and we will do our best to make the review even more comprehensive.
Review based on information available on Monzo website as of February 2023.
Does Monzo business account work overseas?
What are the requirements to open a Monzo business bank account?
Are there any limits on Monzo business account?