Reply to: Cater Allen vs HSBC/Santander Business banking

[matzie]

Cater Allen don't support Faster Payments, at least not properly. Set up a payment online before 3pm (or maybe 4?) and the next day at somewhere between 1pm and 2pm it will go into the target account as a Faster Payment. I find that quite annoying but no other complaints with CA.

[jamesbrown]

I've had a Santander/Abbey business account since 2007 and for several years ALL my work was with overseas clients, and I hired up to 5 sub contractors at a time (probably 10 in total). I never had such problems as you describe... maybe CA have different back-end systems though.

90%+ of contractors ARE only in need of extremely simple banking, that's the whole point. One payment in a month, a handful of SO/DD for accountancy and so on, and the odd dividend or transfer to business savings account. In business banking terms, contractors only need "my first bank account"

They may have different systems but, fundamentally, Cater Allen is a small player with very basic online services. They are not a clearing bank, unlike HSBC. Cater Allen use RBoS for clearing, via other intermediaries overseas. Overseas payments (particularly non-EU) require an essay of instructions. When you have multiple intermediaries in a chain, things can and generally do go wrong. These problems are not always caused by Cater Allen directly, but they are a structural symptom.

Likewise, almost all of my business comes from overseas and I am speaking from direct experience (of Cater Allen, not their parent, Santander). So, there are degrees of simplicity and, while I agree that contractors are definitely at one end of that spectrum, banks like Cater Allen are pretty inflexible to deviations from the norm.

[d000hg]

I've had a Santander/Abbey business account since 2007 and for several years ALL my work was with overseas clients, and I hired up to 5 sub contractors at a time (probably 10 in total). I never had such problems as you describe... maybe CA have different back-end systems though.

90%+ of contractors ARE only in need of extremely simple banking, that's the whole point. One payment in a month, a handful of SO/DD for accountancy and so on, and the odd dividend or transfer to business savings account. In business banking terms, contractors only need "my first bank account"

[jamesbrown]

Money lenders have only been running based on interest since biblical (or earlier) times.

In biblical and earlier times, yield curves probably weren't sat on by extraordinary monetary policy, but I digress...

My free bank charges no fees to send or receive payments and doesn't pay worse interest than my paid bank. And some of their additional services like overseas payments are also on a par or even cheaper in some cases.

Overseas payments with Cater Allen? They are utterly hapless at sending or receiving overseas payments in my experience. They routinely lose foreign payments for days, even weeks in some cases. The exchange rates are poor and transaction fees poor/average. They would prefer not to have UK businesses with overseas clients, as it doesn't fit their simplistic risk profiling in this new regulatory environment. Try searching CUK for recent experiences along these lines. Basically, if you're a very simple customer with simple needs, Cater Allen are fine (and their call centre staff are pretty good too). Otherwise, you're better off with HSBC, IMHO.

If you are keeping sizeable amounts in your business account, the fees you are charged are not where your bank is making money from you. Actually maybe they were introduced because there are so many tiny business making virtually no money, and the bank isn't interested in accounts with £24 in them

Why would anyone keep a sizeable amount in their business current account when there are plenty of easy-access business savings accounts earning decent rates, relatively speaking?

[d000hg]

The foundation of modern banking in the absence of QE, perhaps One way or another, whether paid upfront or skimmed from transaction costs elsewhere, fees are levied.

Money lenders have only been running based on interest since biblical (or earlier) times.

My free bank charges no fees to send or receive payments and doesn't pay worse interest than my paid bank. And some of their additional services like overseas payments are also on a par or even cheaper in some cases.

If you are keeping sizeable amounts in your business account, the fees you are charged are not where your bank is making money from you. Actually maybe they were introduced because there are so many tiny business making virtually no money, and the bank isn't interested in accounts with £24 in them

[jamesbrown]

If you have to call your bank, do you knock 10 minutes off your billing day?

If you have to call your bank, do you consider that time well spent?

Banks make money from you by using your money, or charging you to borrow theirs. That's the foundation of modern banking - fees are not something essential. Typical business accounts pay damn-all interest.

I totally agree that for £5/month it's not a big deal, but as a customer with Santander (free) and HSBC (paid) they are pretty equivalent for a contractor - we need such a stripped down service.

The foundation of modern banking in the absence of QE, perhaps One way or another, whether paid upfront or skimmed from transaction costs elsewhere, fees are levied.

[d000hg]

If you have to call your bank, do you knock 10 minutes off your billing day?

Banks make money from you by using your money, or charging you to borrow theirs. That's the foundation of modern banking - fees are not something essential. Typical business accounts pay damn-all interest.

I totally agree that for £5/month it's not a big deal, but as a customer with Santander (free) and HSBC (paid) they are pretty equivalent for a contractor - we need such a stripped down service.

[jamesbrown]

The "it's only £X and I'm happy to pay £X for what I get" argument doesn't make sense if you can get the same service for £0. It's on par with "you were happy to take the role for that rate, so the fact you now found the agent is taking 50% of the client's money is irrelevant".

But can you get the same service for £0? Free banking (as in, free from monthly fees) is ultimately a flawed concept, as the banks are making money somewhere through their cost structure, which is often less transparent to the customer. Customers with very basic needs may come out ahead, others will not. On the whole, I would say Cater Allen are acceptable until you have a problem with them, but they do not provide an equivalent service to HSBC. When a bank starts to cost you time, especially at the rates most of us charge, "free" applies only in the most superficial way.

[d000hg]

Bank charges are offset to a degree by interest earned and amount to a monstrous £100 a year. For the service and facilities I get in exchange, that seems cheap to me. YMMV.

The "it's only £X and I'm happy to pay £X for what I get" argument doesn't make sense if you can get the same service for £0. It's on par with "you were happy to take the role for that rate, so the fact you now found the agent is taking 50% of the client's money is irrelevant".

[malvolio]

Why bang on about a bank that charges?
I do all my banking online - the call centre is there in case you need it. Since I pay myself once a month it's quite easy to work out when you need to pay yourself for the cash to be there next day. I can't see how anyone can justify bank charges when there's a free alternative. You obviously have money to burn.

Bank charges are offset to a degree by interest earned and amount to a monstrous £100 a year. For the service and facilities I get in exchange, that seems cheap to me. YMMV.

[TykeMerc]

I've had my business account with Cater Allen for quite a while, never had any cause for complaint.

[Sausage Surprise]

People keep banging on about that like it's a good thing. Why do you need to call anyone to do routine banking? I haven't had to call HSBC for anything since 1998, and that was for a corrupted security token.

And what about same day payments...?

Why bang on about a bank that charges?
I do all my banking online - the call centre is there in case you need it. Since I pay myself once a month it's quite easy to work out when you need to pay yourself for the cash to be there next day. I can't see how anyone can justify bank charges when there's a free alternative. You obviously have money to burn.

[malvolio]

Nowt wrong with Cater Allen. Completely free, online banking and a deferred debit card. That's about all you need as a contractor. Their call centre service is second to none also.

People keep banging on about that like it's a good thing. Why do you need to call anyone to do routine banking? I haven't had to call HSBC for anything since 1998, and that was for a corrupted security token.

And what about same day payments...?

[d000hg]

Cater Allen are part of Santander

So what? First Direct is part of HSBC but they are quite different.

[Support Monkey]

Cater Allen are part of Santander