Why so many owners are switching apps instead of branches
The numbers tell part of the story. Starling says more than 450,000 businesses now bank with it. Monzo claims over a million business customers, and Tide reports well over 650,000 members. That shift has happened quickly, and it has changed what a business account is expected to do: send invoices, hold tax money aside, link to Xero or FreeAgent, and put a card in a subcontractor's hand by Friday.
The awkward part is comparison. Thirty years ago you walked into a branch and asked what the charges were. Today you read four different pricing pages, each structured differently, and try to work out whether twenty transfers a month costs you nothing or twenty pence each.
Four friction points come up again and again with UK owners:
- Charges per payment. A headline monthly fee of £0 can still mean 20p on every outgoing bank transfer. For a sole trader making 100 transfers a month, that adds up faster than a paid plan would.
- Currency conversion. Anything invoiced in euros or dollars picks up a markup, usually somewhere between 0.4% and 2.5% depending on the provider.
- Cash and cheques. Digital-first accounts are weaker here. Cash deposits often carry a percentage fee, and cheque imaging limits vary enormously.
- Eligibility confusion. Most app-based providers only accept UK sole traders or directors of UK limited companies. A partnership, a trust, or a company registered in the Channel Islands may find itself pushed back to a high street bank.
Comparisons also get muddled by deposit protection. Eligible deposits at UK-authorised banks are covered by the Financial Services Compensation Scheme up to £120,000 per eligible person, per institution. That applies to most business current accounts, but check the individual provider on the Financial Services Register rather than assuming it.
What the main options look like side by side
| Provider | Monthly cost on entry tier | Best suited to | Strengths | Watch-outs |
|---|
| Starling Business | No monthly fee | Sole traders and small limited companies wanting everyday banking | No charge on UK transfers, cash deposits at Post Office, accounting integrations, 24-hour in-app support | International transfers cost more than specialist providers |
| Monzo Business Lite | No monthly fee | Very small teams, single-director companies | Fast mobile signup, instant payment notifications, spending pots, 24/7 chat | Tax pots and invoicing sit on paid tiers; cash handling is limited |
| Monzo Business Pro / Team | Roughly £9 to £25 a month | Owners who want invoicing and tax pots in one app | Automates tax set-aside, connects to Xero, QuickBooks and FreeAgent, multi-user access | Fees rise as team members are added |
| Tide | No monthly fee on the basic tier, paid plans in the mid-teens to about £60 | New sole traders and first-time company directors | Invoicing and bookkeeping add-ons, HMRC-ready filing tools, fast onboarding | Per-transfer charges on the entry tier add up with volume |
| Revolut Business | Entry plan with a monthly fee, scaling to around £30 | Businesses handling multi-currency payments | Large transfer allowances, virtual cards, team controls | Support is app-based; some features sit behind higher plans |
| High street banks (NatWest, Barclays, HSBC, Lloyds, RBS) | Typically £0 to a low monthly fee, with transaction charges | Businesses needing cash, cheques, lending or a relationship manager | Branch access, overdrafts, invoice finance, physical cash handling | Per-transaction charges are common, and onboarding is slower |
Three costs that catch people out
Per-transfer charges on a "no monthly fee" account
This is the single most common surprise. An entry-level account that charges 20p per outgoing transfer looks cheaper than a £9 monthly plan until you pass about 45 payments. Above that volume, the paid tier usually wins. The trick is to count last month's outgoing payments before you compare, not after.
A freelance illustrator in Bristol made the switch last year after adding up 130 transfers a month on a pay-as-you-go plan. She moved to a paid tier with unlimited UK transfers and stopped thinking about it. Nothing dramatic — just a smaller line in her accounts.
Currency markup on international invoices
If you bill overseas clients, the exchange markup matters more than the monthly fee. Rates published by providers range from roughly 0.33% to 2.5%, and that gap on £5,000 of euro invoices is real money. Wise and Revolut tend to be sharper on conversion; Starling and Monzo are more comfortable for UK-only work.
Cash deposits and cheques
Market traders, cafés and anyone taking cash will feel this. Some app-based accounts charge a percentage on cash paid in, with a minimum fee per deposit. High street accounts often handle cash at no charge but levy per-transaction fees elsewhere. There is no single right answer — only the answer that matches how money actually arrives in your business.
What owners say about the day-to-day
Matt Navarra, a social media consultant based in Wales, puts the appeal simply: "I can spend more time doing the things I enjoy, which is why I started my business in the first place." Sally and Chris, who run a small business on Monzo, talk about instant notifications — knowing the moment a client pays, and seeing what has gone out without opening a spreadsheet. That visibility, rather than the fee table, is often what tips people over.
The practical downside is worth stating plainly. App-based support is fast when things are normal. When something is genuinely wrong — a frozen payment, a disputed transfer, a fraud attempt — having no branch to walk into can feel exposed. Many owners keep a second account with a high street bank for exactly this reason.
How to choose without overthinking it
Work through these five steps in order. Each takes minutes, and together they narrow the field to two or three providers.
- Match the account to your legal status. Sole trader or limited company director? Most digital providers will take you. Partnership, LLP or a company with complex ownership? Start with a high street bank.
- Count your monthly payments. Under about 20 outgoing transfers, a pay-as-you-go account is usually cheaper. Well above that, a flat monthly fee wins.
- List what you actually handle. Cash, cheques, euros, dollars, subcontractor cards, director loans. Each one eliminates or promotes a provider fast.
- Check the accounting link. If you use Xero, QuickBooks or FreeAgent, confirm the connection is native and free to enable, not a paid add-on.
- Open a backup account. A second account at a different institution costs nothing to hold and protects you if a payment gets held up at the worst possible moment.
Where to get local help
Business support in the UK is genuinely well organised, and most of it is no-cost to access. Growth Hubs operate across England and offer banking and finance guidance by region. Business Wales and Scottish Enterprise run equivalent advisory services, and Invest Northern Ireland covers company formation and finance queries there. The Federation of Small Businesses publishes member guides on banking and payment costs. For anything involving VAT registration — currently triggered at £90,000 turnover — or Making Tax Digital, a local accountant will usually review your banking setup alongside your bookkeeping for a fixed fee.
One more practical note: the Current Account Switch Service covers many business accounts and handles the redirect of standing orders and direct debits. It is not universal, so confirm your chosen provider participates before you commit to a switch date.
Start with your last three bank statements rather than the marketing pages. The transfer count, the cash deposits and the currency lines will tell you which account fits, and most providers will open it the same day you apply.
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