Uk payments firm to offer business bank account

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Oct 17 A UK payments firm is offering a business bank account, which will challenge traditional lenders for the custom of small and medium-sized UK firms. With many small businesses struggling for financing as Britain's dominant banks rein in lending to meet higher capital requirements, a string of new banks and alternative funding providers have sprung up. Unlike other newcomers, such as Aldermore and Metro Bank, CashFlows, which provides services including payment processing and electronic invoicing, will not offer loans as it does not have a banking license. Instead it aims to save businesses money by consolidating their business banking services into one account, helping them run their systems more efficiently, freeing up working capital.

"It simplifies the whole money flow process for businesses," Nick Ogden, Chief Executive of CashFlows, told Reuters, estimating it could save businesses as much as 40 percent of what they spend on fees and charges."By tying services together and making them simple for businesses you can save them money."

Research carried out by pollsters YouGov found British small businesses spend more than 2.3 billion pounds ($3.69 billion) a year on transaction charges and business banking fees, he said. Ogden, best known as the founder of payment-processing business WorldPay, which was taken over by Royal Bank of Scotland for about 40 million pounds in 2002, said the CashFlows account would be targeted at businesses with an annual turnover of up to 50 million pounds.

CashFlows, which launched the account on Wednesday, already has around 500 businesses ready to sign up and Ogden says more than 50,000 could be using it by the end of 2013. Although unable to offer the full range of banking services itself, CashFlows has partnered with Shawbrook Bank to provide lending facilities. Through Shawbrook, it will also offer a 95-day-notice deposit account. Ogden said the company was also looking at teaming up with other banks in the UK and Europe in a similar way.