When it comes to business banking in the UK, there are a growing number of digital-only options available to entrepreneurs and small business owners. Two of the most popular choices are Wise vs Monzo. In this article, we’ll compare the two options and explore their respective pros, cons, key differences, costs, and other considerations.
Wise, formerly known as TransferWise, was founded in 2011 and is headquartered in London. The company’s primary focus is on international money transfers, although it has expanded to offer business accounts as well.
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Monzo, on the other hand, was founded in 2015 and is a challenger bank that offers personal and business accounts with a range of features and benefits.
Wise vs Monzo
Here’s a table comparing some of the key features of Wise and Monzo for business banking:
| Features | Wise | Monzo |
|---|---|---|
| International Transfers | Low fees for international transfers, free local transfers in several currencies | Fees for international transfers, free local transfers in GBP |
| Multi-Currency Account | Yes | No |
| Business Loans/Overdrafts | No | Yes |
| Automated Bookkeeping | No | Yes |
| Invoicing Tools | No | Yes |
| Target Audience | Businesses that operate internationally | Businesses that operate domestically |
| Fees | Lower fees for international transfers | Higher fees for some services |
| Customer Service | 24/7 support, email and chat only | 24/7 support, email and chat, phone support available for emergencies |
It’s important to note that this table is not comprehensive and should not be the sole basis for making a decision between the two options. Other factors, such as the size and type of business, may also need to be considered when making a choice between Wise and Monzo.
Statistics
- Wise:
- As of September 2021, Wise had over 10 million customers worldwide, including both personal and business accounts.
- Wise processed £54 billion in cross-border transactions in the fiscal year 2021, highlighting its strong presence in international money transfers.
- Wise’s business accounts support over 50 currencies, making it a versatile option for businesses that operate globally.
- Monzo:
- As of September 2021, Monzo had over 5 million customers, including both personal and business accounts.
- Monzo has provided over £5 billion in loans to individuals and businesses since its launch in 2015, indicating its lending capabilities and support for businesses’ financing needs.
- Monzo offers integrations with various accounting software platforms, such as Xero and FreeAgent, streamlining financial management for businesses.
Pros and cons of Wise for business banking
One of the main advantages of Wise for business banking is its low fees. Wise offers free local bank transfers in several currencies and low fees for international transfers.
The company also offers a multi-currency account, which can be useful for businesses that operate globally.
However, one of the downsides of using Wise is that it doesn’t offer business loans or overdrafts, so businesses that need financing may need to look elsewhere.
Pros and cons of Monzo for business banking
Monzo, on the other hand, offers a range of features and benefits that can be useful for businesses, including automated bookkeeping, tax calculations, and invoicing tools.
Monzo also offers business loans and overdrafts, which can be helpful for businesses that need financing.
However, Monzo’s fees can be higher than some of its competitors, and the company has been criticised for its customer service in the past.
Key differences
One of the key differences between Wise and Monzo is their target audience. Wise primarily targets businesses that operate internationally, whereas Monzo targets businesses that operate domestically.
Another key difference is their fee structures. Wise has lower fees for international transfers, but Monzo offers more features and benefits for businesses.
Additionally, Wise offers a multi-currency account, whereas Monzo does not.
Costs and other considerations
When it comes to costs, Wise is generally the cheaper option for businesses that make a lot of international transfers. However, Monzo may be more cost-effective for businesses that operate primarily in the UK.
It’s also worth considering the level of customer service offered by both companies. While both companies offer support through their apps and websites, Monzo has been criticized in the past for its response times and customer service.
In conclusion, both Wise and Monzo offer a range of benefits for businesses, but the choice between the two ultimately comes down to the individual needs of each business. If your business operates internationally and needs to make a lot of international transfers, Wise may be the better choice.
However, if your business operates primarily in the UK and needs access to features like automated bookkeeping and invoicing, Monzo may be the better choice. Ultimately, it’s important to do your research and consider your options carefully before choosing a business banking provider.
FAQ
No, both Wise and Monzo require you to have a registered business in order to open a business account. However, Wise also offers personal accounts for individuals who need to make international transfers.
Yes, both Wise and Monzo are regulated by the Financial Conduct Authority (FCA) in the UK and are required to hold customer funds in separate accounts from their own operating funds. This means that your money is protected in the event that either company goes bankrupt.
No, both Wise and Monzo offer accounts for businesses based in several countries around the world. However, you may need to meet certain eligibility criteria, such as providing proof of address or identification documents.
Yes, both Wise and Monzo are designed to accommodate a range of business sizes and transaction volumes. However, you may need to upgrade to a higher-tier account or pay additional fees for certain features or services.
No, neither Wise nor Monzo offer cash deposit services at this time. However, both companies offer a range of other payment methods, such as bank transfers and card payments.
It depends on the account type you choose. Wise offers a free business account with no monthly fees, but some services, such as international transfers, may incur fees. Monzo offers several tiers of business accounts, with monthly fees ranging from £5 to £50 per month depending on the features and services included.