Monzo, the British challenger bank, today officially opens commercial bank accounts after an extensive test phase in the past 12 months in which 2,500 business customers were given early access.
Perhaps surprisingly, straight from the Monzo gate offers two versions of its commercial bank account aimed at retailers and SMEs sold – a free account and a premium payment account, which confirms our balance from last week.
The free Monzo business account is called "Business Lite" and has similar functions to the Monzo consumer account. In addition, it not only offers web access, but also mobile app-based banking. The paid business account is called "Business Pro" and costs £ 5 per month.
It has a variety of business functions, including tax pots, that allow companies to set aside a percentage of incoming payments to prepare for a future tax bill (a simple but pretty brilliant function). Integration with third-party accounting software includes several functions. User accounts and in-app billing tools.
In a conversation with Monzo's co-founder and CEO, Tom Blomfield, late last week, I asked him why the bank decided to start charging from the start, although others, such as rival challenger bank Starling, have so far kept commercial banking free have (albeit heavily subsidized by state aid)
“If we charge a small fee, we can invest more in features,” he tells me. “Things like accounting integrations, multi-user access that not all companies need, but the construction of which costs us more. It therefore seems fair to offer a free level for people who do not need this particularly powerful functionality. And then a pro level for people who do it. I think for five pounds a month it's a fabulous value. The number of hours saved by bookkeeping and integration in Xero in bookkeeping will pay off very, very quickly. "
Another notable aspect of Monzo's business banking product is that it feels pretty good to start with. In the early years, the upstart bank placed great emphasis on the market launch and an iterative product development process, which has largely served Monzo well. However, it also led to glitches in the past year and sometimes to the emergence of a philosophy that is moving fast and half baking. With 4 million customers, the company continues to develop its approach, according to Blomfield.
"Your point in Polish is that I think it really fits," he tells me. “I think in 2019, especially in the first half of 2019, we tried to do too many things in parallel and we spread too thinly and started too early. And I think we didn't quite realize that we are now a kind of national brand. YouGov made us number 1 in the UK last year. And I think we still worked a bit like a shabby startup and not like a mature bank. And so we will be launching this year, and this is the first, two or three things … (and) the level of polish and the level of ripeness at launch will be much, much higher. "
Blomfield openly admits that this required a different way of working, which he believed the team had adopted. "I am really, really proud of this business product. It works exceptionally well. The feedback so far has been spectacular and I am very happy about it."
When asked what assumptions proved to be correct and what was less obvious in the twelve months that Monzo spent developing his commercial bank accounts, Blomfield said the team knew that multi-user access would be a big deal and that Instant business notifications are surprisingly useful too. "If you're a freelancer, it's really powerful to know that your customer just paid you," he says.
In contrast, web access became more important than the team initially recognized, which led Monzo to invest quite heavily in a web account for business accounts. In addition, Blomfield frames control pots as “a simple but so powerful function”.
"It's similar to the roundup functionality you have in a personal account," he explains. "Basically, you want to set aside a percentage every time you get paid so you don't have this uncomfortable tax problem 9 to 12 months later. (It's a function) People really loved our feedback and surveys."