We live in an increasingly digital world, embracing it for a variety of business uses. You don’t have a brick and mortar store so why rely on a brick and mortar bank? Join us as we examine which is the best online bank account for e-commerce entrepreneurs in 2020.
Whether you are new to your role as an e-commerce entrepreneur or already have a thriving empire, it’s never too late to look at online bank accounts to help you manage your business’ finances.
Benefits of an online bank account for e-commerce purposes
Online bank accounts are designed to incur fewer overhead costs, and they pass those savings onto you. This results in lower service and maintenance fees, higher interest rates and the good feelings that come from a smaller environmental footprint. Additionally, transactions clear faster than they do in traditional banks.
There are also some hidden and less tangible advantages, such as ease of saving (cash is less easily obtained), showing investors your business is interest in future-proof solutions and ease of integration with your other finance apps. We have included links on how to integrate all of these options with Xero, our recommended accounting software for e-commerce businesses.
If you’re wondering if you need a dedicated business bank account, you can read our opinion in our financial start-up guide for e-commerce businesses.
Monzo launched their business accounts in 2019 and they have been well-received by business owners. They allow free bank transfers and have a facility for saving pots to help you budget for upcoming expenses. Upgrade to the Pro account (£5 a month) to access these plus invoicing facilities and integrated accounted and 6 months of Xero free.
Starling is a popular online bank account for e-commerce entrepreneurs, due to its ease of integration with accounting software, same-day set up and its commitment to no monthly charges. There is also no charge for electronic payments, domestic transfers, or ATM withdrawals.
There is currently no overdraft facility, so going overdrawn will incur stiff penalties.
Tide again has no monthly fee until you expand and allows easy access to funds. A Tide account allows a line of potential credit to business loans of up to £150,000. They are proud of their integration with Xero and allow automatic tagging of all income and expenditure, saving you even more bookkeeping time.
Tide currently does not have a banking license and is not covered by the FSCS. You will be charged 20p for a transfer and £1 for cash withdrawals.
Our final online bank account for e-commerce entrepreneurs is Mettle, a brand that started life under the NatWest umbrella. It has no monthly fees and has the added benefits of allowing you to create and send invoices directly from the app.
There is currently no overdraft facility and standing orders are not available, although direct debits are.
If you would like guidance on choosing an online bank account for your e-commerce business, integrating it with Xero or anything else relating to the financial wellbeing of your brand, get in touch with our team of e-commerce accounting experts today.
The best time to start is now.