As a small business owner one of the first things you need to sort out is a bank account. With Tide this couldn’t be easier. You can literally have an account up and running in under 5 minutes. But accounts such as this aren’t for everyone. Let’s have a look at some of the pros and cons of a Tide account. Who is it for and who isn’t it for? Is Tide even a bank account?
Updated 11th October 2019
Tide is a privately owned financial technology company founded in 2015. It’s essentially a bank, but run slightly differently to traditional high street banks. You still get a sort code and account number and you can still have direct debits and standing orders. However there are a few other key differences that set it apart from the traditional high street banks. From what I’ve seen so far they’re a forward-thinking company and welcome addition to the small business scene. Just make sure they’re suited to your business before opening an account. In this article I want to dig a bit deeper in to what a Tide account actually is. Remember I use affiliate links to fund this website -- they’re better than adverts and don’t cost you a penny extra -- read more about them here. If you want to just jump to it and try out a Tide account for yourself click here.
What is a Tide business account?
Before we start, a very quick summary of what Tide is. Tide is an account designed for modern, tech-savvy businesses. One of their core aims is to take the admin burden off the shoulders of sole traders and micro-business owners.
The really nice thing about the account, especially when you’re just starting out, is that if you’re not making any money the account doesn’t cost you a penny. When you do start doing business there’s just a small 20p charge for each transfer in or out of the account. Card payments are free and as an added bonus Tide are kindly waiving the 20p charges for the first year if you use this link to sign-up.
I’ve read the odd report saying that Tide isn’t a ‘proper’ business bank account -- that is and isn’t true. I’ve been using a Tide account for a while now and it looks and feels like a modern business bank account, so I guess it all depends on your definition of a bank account. Tide gives you everything the big banks offer and more. There are also a few limitations that could be problematic depending on how your business operates. The fee structure is up-front and simple though -- I really appreciate this. I’ve seen some business accounts where the fee structure is explained in 8 point font over the course of a 10 page PDF. Not with Tide:
Who is Tide for?
From a UK perspective, Tide operates like any normal account so should be absolutely fine for the vast majority of businesses.
- You can set up direct debits
- You can set up standing orders (known, more sensibly, as scheduled payments)
- You get on-line bank statements
- You’re provided with a Business MasterCard debit(ish) card and can have up to 35 ‘team cards’ for staff members etc.
- You can pay-in cash at the Post Office (£1 charge)
- You can withdraw cash at ATMs (£1 charge)
Contrary to popular belief, it’s great for cash-based businesses, businesses who accept payments on-line and anyone who accepts payments via a payment provider such as PayPal, Stripe, GoCardless and iZettle. As such it’s ideal for:
- Sole traders
- Self employed
- Small companies
- Small shops
- Independent traders
- Trades people
Real benefits of Tide
What sets Tide apart from the pack, in my view, is ease of account set-up and management. I’ve never known a bank account that’s so easy to open. Ever. In under 5 minutes you can be up and running with an account number and sort code. If you don’t believe me watch this:
By way of a comparison, I recently tried out the account opening process with a well known high street bank. I applied online and provided all of the ID they asked for electronically as requested. It was 3 weeks before I received an account number and sort code! With Tide it was almost instant. The real joys of account management then come in to play once you start making full use off their mobile app. and the associated web interface.
Tide have really put a lot of effort in to making account management as simple as possible. Everything is a real pleasure to use. It’s fast too! Access to the web interface is controlled by scanning a QR code on the screen from your phone. Access is then granted instantly and I MEAN instantly.
Logon to the app. itself is instant via fingerprint recognition. You also have a passcode as backup. Face recognition technology is also used for certain tasks, but generally your fingerprint will be sufficient for most stuff.
- iOS and Android compatible
- Account management via app. or web
- Accounting integration
- CSV exports
- Read-only account access e.g. for accountants
- Multiple Accounts (coming soon!)
There’s some really nifty features such as transaction categories and the ability to upload pictures of your receipts to associate with each transaction:
Above all, IT’S SO FAST!! It’s very rare that I would describe management of a bank account as being ‘pleasurable’ but Tide have really ticked all the boxes here. Everything within the app. and via the web is a joy to use. Hats off to everyone involved in designing this -- nice work. Very nice work.
How ‘fast’ are Faster Payments?
Faster payments seemed to be slightly slower than with other banks. I carried out a test transfer IN to my new Tide account from NatWest and it took about an hour to come through. A similar transfer from NatWest -> Halifax was instant. I tried another NatWest -> Tide transfer on the off-chance it was just due to it being a new payee and it still look 56 minutes. Not a problem, just slightly slower than normal.
I also tried a test transfer OUT from Tide -> NatWest and that was much faster, at around 10 minutes. Halifax -> NatWest was instant though.
Apparently Faster Payments are processed every 30 minutes and cleared within 2 hours, so that would be close-ish to the above timings. Just for information, BACS payments ‘officially’ take 3 working days and CHAPS are same working day. It’s all Faster Payments with Tide though and the above timings shouldn’t be a problem for most people. Obviously as larger sums are involved additional security checks may be implemented. That might slow things down a bit, but I’d rather they kept security as their top concern versus receiving a transfer a few minutes sooner.
Is the Tide card a credit or debit card?
So you’re provided with a ‘Business MasterCard’ when you open your account but it’s really unclear what sort of card this is. It’s actually a ‘prepaid card’ and is marked ‘Prepaid Commercial’. However it seems to function like a normal debit card, drawing on existing funds from your account. So it’s not really a credit card and it’s not really a debit card.
For the vast majority of situations this should be fine, however it could cause some complications. A prime example is HMRC who still charge a fee for business credit cards (cheeky!) but paying your tax using a business debit card is free. There have been some reports of the card not being accepted with certain providers and it’s probably down to the vague nature of what it actually is. Apparently Tide are working on releasing a normal debit card so watch this space! I haven’t had any problems with it so far though.
What about limited companies?
It’s just as easy and quick to open a Tide account for a limited company. My test account was up and running in under 10 minutes. You can see exactly what was involved in this video:
Who is Tide NOT for?
Tide are really shaking up modern business banking but it’s not for everyone. Here are a few of the main differences:
- No cheques
- No international transfers BUT see below
- No IBAN or BIC / SWIFT code
- No overdrafts BUT see below
The biggest change is no more cheques. Now I haven’t written or received a cheque for many years but I know some businesses still rely on this. If you’re still in a sector where you get presented with cheques on a regular basis then this probably isn’t the account for you. Likewise, you don’t get a cheque book so you can’t write cheques. Why cheques still exist is beyond me.
There are also certain restrictions on international transfers however Tide do offer an International Currency Account (ICA) that might be a better solution anyway. As far as I’m aware though this is only available for limited companies.
They also don’t offer overdrafts, however they’ve partnered up with Iwoca for business loans, which is essentially what an overdraft is. So you can potentially get up to £150,000 of credit straight through the app.
What about Tide for content creators? E.g. YouTubers?
This is where things get a little more complicated. There must be tens of thousands of YouTubers in the UK who need a bank account to manage their income as influencers and digital content creators. At first glance Tide would be the PERFECT account for the tech savvy folk who are receiving money through a variety of income streams.
One of the biggest frustrations with Tide, and it’s not really their fault, is that the account would appear to be incompatible with a number of international online payment providers. For the content creator market (such as myself) this could be problematic.
Payoneer immediately rejected Tide a valid destination account. This is potentially a big problem for any affiliate schemes that pay out via Payoneer, such as Patreon and Teespring. Also, Amazon Affiliates requires an IBAN and BIC code, so that straight away rules out Tide. Here’s a quick run-down for all the fellow YouTubers out there. If you can add to this then please let me know via Twitter.
Using Tide as a destination account to accept PayPal payments appears to work fine.
Fine for receiving card payments via iZettle. Less fine for receiving affiliate payments as this requires an IBAN & BIC -- this should impact very few people though.
I’ve yet to try accepting normal payments via Ebay to Tide but have been assured these work fine. Payments via the Ebay Partner Network (affiliates) work fine too.
I added my Tide account to my Stripe payment gateway and it worked fine without any problems.
Apparently fine but I haven’t tested it.
YouTube / Google AdSense: FINE
Payments from Google Ireland for AdSense revenue worked fine.
When I tried to link my Payoneer account to Tide I received an e-mail from Payoneer saying they don’t support the account that was added. I escalated this within Payoneer but they didn’t bother getting back to me. So Payoneer is a non-starter with Tide. Tide suggested I try using Transferwise, which I did. A somewhat convoluted way of getting money out of Patreon (Patreon -> Payoneer -> Transferwise -> Tide) but once again ‘computer said no’. The Transferwise account was also rejected by Payoneer. Payoneer would appear to only work with traditional bank accounts so that’s annoying. You can of course pay out from Patreon and Teespring via PayPal but Payoneer would seem to be more fee-efficient.
Teespring pay out via Payoneer or PayPal. So Payoneer isn’t an option but PayPal should be fine.
Similar to Teespring, Patreon pay out via PayPal or Payoneer. If you have a Tide account you’ll need to route the funds via PayPal.
Amazon Affiliates: NOPE
I don’t know how many Amazon Affiliates there are in the UK but I bet there’s a lot. At the time of writing you need an IBAN / BIC code to receive money from Amazon and that just ain’t an option with Tide unless you’re a limited company.
So, if you’re a content creator all is not lost BUT you might have to do some creative bank account management to get around the above limitations. Amazon is probably the biggest hurdle but there will be other affiliate and influencer schemes that rely on IBANs and BICs. Let’s see how this one progresses as I imagine Tide don’t want to miss out on this potentially huge market!
There are a bunch of account limits in place by default. These are all at quite sensible levels and unlikely to impact the vast majority of businesses:
- Maximum account balance: £25,000
- Faster Payments in: £50,000 per transaction
- Faster Payments out: £10,000 per transaction, £100,000 monthly limit
- Card transactions: £10,000 monthly limit & £10,000 daily limit per card
- ATM limits: £500 cash per day max
You can raise a request to increase the limits via the app. so no problems there.
So… is Tide a normal bank or not?
According to Tide’s web site, their services are provided via ‘PrePay Solutions’ who are regulated by the FCA via an e-money license. You don’t get the same levels of FSCS protection that are offered via high street banks, however they do guarantee that your funds are kept in a ‘safeguarding account’ (operated by Barclays). Apparently this means funds are never loaned out to other customers or reinvested, so FSCS protection isn’t required. What would happen in the event of insolvency is anyone’s guess but they do state that “the service would continue to run as normal under management of PPS (their card issuer and account provider)” and are “…safeguarded according to the rules that are stated above”.
So, in my humble opinion, your funds are probably perfectly safe. I have no intention of leaving large sums of money in the account anyway. I just need enough to pay day-to-day bills and expenses. Everything else will be drawn out to my personal account. If you do plan on having large sums of money ‘resting’ in the account I would perhaps consider setting up a separate business savings account through one of the big names, just for peace of mind.
So should I get a Tide business account?
It’s worth opening an account just to experience the joys of what a 21st century bank account should look like! In a nutshell it’s all down to whether the limitations outweigh the benefits for your business. For most small businesses who deal solely within the UK a Tide account will be a very tempting alternative to the big names. I’ve been blown away by the account set-up time and ease of use. The account is a genuine pleasure to use. It’s free to set up an account so give it a try and see if it suits your business.
Remember if you want to take advantage of Tide’s offer of 12 months free transfers, just click on the link above or click here. If you’ve found this useful or have some additional information about Tide I’d love to hear from you. Get in touch via Twitter!
Article originally published: 27th May 2019
Last updated: 11th October 2019