Small Business Banking First: Tide Opens Accounting Services to Non-Account Holders

Digital bank

Further blur the lines between the banking provider and the accounting provider.

Image source: Tide.

Tide is offering its accounting products, starting with invoicing, to non-account holders in an unusual move that will open its service to customers of competing merchant banks.

While the launch of Tide Open Access is limited to invoicing, the fintech says its expense management, payroll and credit services will soon be available to all SMBs, not just those whose checking account is with Tide.

CEO Oliver Prill said while new businesses are open to choosing a digital banking challenger like Tide, for established businesses such a decision is often difficult, if not impossible.

“We have come to the conclusion that the only material way to introduce competition for established businesses is to allow them to virtually switch to using the Tide platform without switching bank accounts.”

The creation of Tide Open Access is funded by BCR fintech funding and is one of its public commitments.

Surveys consistently indicate that around 13% of businesses plan to switch banks in the next 12 months, but merchant bank switching rates are only around 4%.

Take away food

It’s clear from Tide’s move that it will open its appeal to more SMBs while putting the company in more direct competition with rival enterprise software companies from Expensify to Concur.

Although Prill wants to continue positioning Tide’s offering as that of an “enterprise financial platform” – which can be connected to a host of other software providers, like Xero and Sage – as the As Tide’s feature set grows, it now increasingly competes with these vendors.

Finally, exposing Tide’s services to non-account holders indicates that Tide could divert its business priorities away from owning the SME checking account.

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Kristan F. Talley