Category: Fintech

Transferwise add business debit cards!

I’ve often complained about the high cost (i.e. FX fees) involved with doing business internationally – most banks in the UK just don’t understand that modern businesses are increasingly international and that “traditional” 3% FX charges on card spend and expensive/lengthy SWIFT transfers (and the SWIFT system in general) make them really uncompetitive.

I’ve tried to find solutions. The best I’ve found are:

  1. Revolut’s business product, although as a limited company, you have to do a lot of volume to make it worthwhile, which is hard as the USD facilities are very limited.
  2. Starling Bank’s business account, that I’ve decided we won’t adopt even when they accept multi-PSC businesses, because of the complete lack of a web interface.
  3. Curve – a sort of proxy that charges the Visa/Mastercard of your choice with the Mastercard rate + 1% when you spend on it in a foreign currency (the 1% is eliminated when you use a cashback credit card).

Until today when this arrived in my inbox!


Transferwise business debit cards are here

Whilst I wouldn’t normally recommend using an e-money product as a bank account, Transferwise are backed by the Royal Bank of Scotland and were one of the first entrants to the fintech space. We’ve been using them on and off for years and the only thing stopping us using their borderless business account was the lack of a debit card.

Their (market-leading) offer is now:

  • FREE real bank accounts in the UK, USA and EU (and elsewhere),
  • FREE debit card
  • Web AND mobile banking
  • Faster Payments, SEPA, ACH AND Wire (with a fee)
  • Approximately 0.5% FX fee,
  • Proper company and decent service
  • Xero integration coming soon(tm)

Interested? Sign up here.

Starling launches its “challenger” business account

Starling Bank

I was lucky enough to attend Starling Bank‘s business account launch party. It was a nice opportunity to walk around the new office development in Finsbury Square, to meet forward thinking business owners and to understand a bit more about Starling’s roadmap.

I am a happy Starling personal customer and, in my view, if you are interested in fintech, Starling is the company to watch. They were the first of the challenger banks to obtain a banking licence and, of the few challenger banks offering current account, they have the best offer on paper. This review is quite critical but that is because I am holding them to a standard that is well above the norm.

  1. There was heavy criticism from the audience around spend tracking. Spend tracking as it stands at the moment is extremely simplistic – there are a small number of fixed categories and spend is assigned to one of the categories based on the merchant’s MCC. The result is that your spend will be put into one of a few vague buckets such as “travel” or “bills”. For personal customers with relatively simple budgeting needs, this may suffice but for businesses, this feature is completely useless. Starling have heard this feedback but it seems low on their list of priorities.
  2. I was the only one to raise the lack of web-based banking. On Starling’s forum, the lack of web-based banking attracted similarly passionate critique to the simplicity of spend tracking. The audience, myself excluded, didn’t seem to mind. Starling confirmed that they are still committed to being mobile only but, when they release their Xero and FreeAgent integrations, that will provide a web interface, sort of. They also suggested that their apps will be made usable on tablets “soon”, which will at least make it easier to see what’s happening without frantically scrolling up and down.
  3. Xero and FreeAgent integration isn’t here yet but it sounded like that is their top priority right now and will be available in a matter of weeks. CSV export is available now. It sounds like integration with other accounting systems, including Sage and Quickbooks, as well as Yodlee, are a very long way off.
  4. They have initially chosen to target limited companies, with one significant person of control, with a turnover below £1.7m, who don’t need cash or cheque facilities. They will be able to start using it immediately and will pay nothing. Companies with a turnover over £1.7m that meet the other criteria will be able to sign up but will be liable for yet unannounced fees at a yet unannounced point in the future. Seems like quite a narrow market segment to me. Sole traders, LLPs, companies with more than one controlling party etc., are all coming “soon”.
  5. Pricing was announced, sort of. For limited companies who either have a turnover below £1.7m or who have fewer than 10 employees, there will not be any charges at all. Not even for foreign currency. Businesses larger than that will enjoy free banking until Starling’s business user base grows (how much?!) and will then have to start paying (how much?!)
  6. Cash deposits are still coming “soon”. Starling talked a lot about costs but, for most SMEs, the key cost of their banking is cash handling, which Starling don’t offer at all. Take that away and you’re saving something like £5-7.50 per month, after a free 12-24 months, for a high street bank’s electronic tariff.

So, overall, the thing that really stood out to me was the extensive use of the word “soon” and no mention of when “soon” means weeks and when it means probably never. The general vibe in the room was that is ok because Starling is moving fairly quickly. In my view, though, Starling ought to take a page out of Monzo’s book on this one and create something like a publicly accessible Trello board to help customers understand what “soon” means.

In summary, Starling do now have a business current account but it’s very MVP. Personally, I will be revisiting this topic when the requirement for businesses to only one significant person of control is dropped.

Curve – the solution to business FX woes?

About a year ago, I decided that enough was enough, and I had to find an alternative to Paypal to cut costs. At the time, we were paying PayPal around £300 per month, which was at their 2.9% rate, generally plus a 1% cross border fee (i.e. we were paying them almost 4%). Although Elavon gave me the runaround, Worldpay offered a surprisingly good solution for a fraction of the price. Moving from Paypal to Worldpay was one of the best decision I’ve made.

FX Fees

However, I’d yet to find an equally good solution to the smaller but still substantial FX fees we pay for various software and hosting products in USD and EUR. I’d looked into currency accounts where the cost and headache of getting one and reconciling it would have outweighed the benefit and “travel” credit cards that, instead of paying cashback, simply don’t charge FX fees.

I didn’t want to have to reconcile two credit card accounts, nor did I want to give up the Membership Rewards that I get from running business expenses through my American Express. However, I was deeply unhappy that American Express charge a 3% FX fee on top of the £450pa card fee.

To make matters worse, although I have been a happy occasional customer of Transferwise, and was eagerly anticipating their stress-free currency account service, when it was launched, I realised that it doesn’t come with a card. Most of these software and hosting services rely on card payments.

Imagine Curve

I read about Curve on a travel site. Essentially, it’s a prepaid card, similar to Revolut. However, whereas Revolut prohibits business use, Curve is specifically for business use. Well, allegedly. The offers for Topshop, Goldsmiths and Dorothy Perkins might suggest that it’s a commercial card purely because commercial cards attract a higher acquisition fee but that’s not my problem.

The other key difference, which is a big help from a business point of view, is that rather than having to keep the card topped up or getting another statement to reconcile, each transaction is converted to GBP immediately and billed in GBP to the card of your choice. In this case, my business debit card. Therefore, I can rely on my business bank statement and I have a receipt from Curve and from the merchant with a complete paper trail.

It gets better

Not only is this a very easy way of cutting FX fees from 3% (Santander / American Express) to 1% (Curve), you can also attach several Visa and Mastercard credit and debit cards to it and pick the right card for each purchase. You can even reassign the card a purchase is funded from after the purchase. Again, this is probably more useful for personal users, of whom I’m sure there are many, because a the FX fee could be offset by using a cashback Visa/Mastercard credit card.

Also, you’ll get £5 free on the card the moment it arrives (code: TENPY) and the whole order, verification and activation process is really smooth. The limits are also, in my view, reasonable for most small businesses.

To make it perfect

I understand that Curve have to sustain grow their business and to do that, they have to charge their customers. However, I would like to see an option to pay a fixed monthly/yearly fee in place of 1% of my FX spend. This would persuade me to use the card more without having to think of the fee at each purchase, especially with larger purchases.