Why traditional banks don’t work hard enough for small businesses

July 27, 2020
5 minutes read

Traditional banks are out of date, and have never been designed to support small businesses. Whether it's the fees, long-term contracts, or all the manual time required, it's hard to believe that small businesses have put up with them for this long.

Let’s dive into a few of the reasons why traditional banks are no longer a viable option for your small business.


The average small business owner pays ~$20 in monthly fees, including service and maintenance fees, ATM fees, bill-pay fees, and more. A report from ACI Payments even suggests the average amount of bank fees paid could be over $450 per year. Typically a business bank account is also required to keep a $500-5000 minimum balance, which can be unreasonable for small businesses with fluctuating cash flow. And let’s not forget it often costs money every time you make a transfer, typically up to 1.5% of the payment cost - or $15 in fees for every $1000 in transactions. Bottom line: all those fees add up fast.


Beware of long-term commitments. You don't want to get stuck in a bank that's hard to leave. According to a survey from BlueVine, only about 1 in 10 small business owners say their bank currently meets their needs and 70% are looking to switch banks. It seems that huge transformation is required in the banking industry, and the options aren’t looking good for nearly 90% of unsatisfied small business owners. And what makes it more frustrating is that there can even be hidden costs to switching accounts. Not to mention the time lost and the hassle of signing binders of paper, going in-person to the branch, and holding on the phone for hours.

Manual bookkeeping

And at the end of every month, you have to reconcile expenses manually and do your bookkeeping. If you're one of the more than 75% of US small businesses who manage their finances without an accountant on staff, you know this is often a pain on your own. Using a bank's online software is not usually an "intelligent" process, and requires manually downloading transactions, keeping physical receipts on hand, and then importing/scanning them into separate software. And that’s not even talking about the pain of tax season. There has never been a bank that makes it easy to do your accounting and bookkeeping.

Nothing out there has served all your banking needs as a small business. If you work in a services-based business or aren't selling high volume products online, you've essentially been left out to dry. There were no real options. Until now.

The future of banking for small business

Wave Money is the first no-fee business bank account that combines automatic bookkeeping, payments, and cash flow management in one place. Put simply, it’s the future of small business banking. And you can set it up in minutes, for free, with no hidden costs and zero long-term commitments.

There are over 400,000 people who use Wave’s software. One of the main pain points that continued to come up was that people were looking for a reliable, intelligent, and direct way to integrate their bank account with their accounting software. Often data lags or goes missing due to connections going down or banks not providing your financial data to third-party apps. Having direct access to your data gives you real time insight without any of the hassle. 80% of small business owners say they need more than their financial institution to track their finances, and using Wave Money will make it easier than ever to do.

All-in-one solution

Now, your business finances are all in one place. With built-in bookkeeping, you can say goodbye to logging into different systems, downloading bank statements, and comparing receipts with your accounting software. No more lost time and money.

Built Smarter

We wanted to build an intelligent app that lets you spend more time doing what you love, and less time managing the boring stuff. According to an article from the Bank Administration Institute, nearly 60% of business owners would use expense categorization if their business offered it. Wave Money smartly categorizes your business income and spend, and with machine learning, it gets smarter over time.

Creditable and Insured

In case you were wondering, this is a real business bank account. Unlike many online payment services, this business bank account is the real deal, and it's insured by the federal government for deposits up to $250,000, to keep you secure and safe. You will also get access to the largest free ATM network in the United States.

How is Wave Money Different From a Traditional Bank?

Traditional business bank accounts are built for big companies with larger workforces. They do not cater to the needs that we know small businesses’ have. Traditional bank accounts are not a great choice for small businesses who need to keep their costs down and their cash flowing.

With Wave Money, there are no monthly fees, no account minimums and no transfer or transaction fees - it’s everything a small business owner needs to cut costs. Wave Money also offers an intelligent expense management system unlike traditional banks by offering built-in bookkeeping and expense categorization which means you can focus on your business and not your accounting.

Why Choose Wave Money Over The Alternative Banks?

Wave Money is the first viable business bank account for service-based businesses. See how it compares to a few popular alternatives:

Wave Money vs. PayPal

PayPal is first and foremost not a bank account. It targets businesses who primarily offer products online and internationally by allowing them to take payments electronically with the PayPal Business Debit Card.

Unlike Wave Money, PayPal does not offer built-in bookkeeping and does not offer any FDIC Insurance on deposit in a PayPal account. Wave Money offers a more intelligent solution for your expenses so you can keep your finances organized all in one place.

Wave Money vs. Square

Square is primarily a credit card processor which offers a Business Debit Card that allows you to pay for expenses directly from an account held by Square. Square is aimed at businesses that receive payments in person who take payments using Square’s point of sale equipment or a card reader.

Square, however, is not a bank account and does not allow deposits other than payments accepted through the Square account. It also does not support sending money or check deposits and does not offer FDIC insurance of funds in the Square account.

With Wave Money, you will have more options for deposits by either transferring funds or directing your Wave Invoices to deposit payments directly into your Money Account. Square also does not have intelligent expense management whereas Wave’s built-in bookkeeping will save you tons of time.

Wave Money vs Shopify Balance

While it’s not live yet, Shopify recently unveiled Shopify Balance, which is their version of a business bank account and payment card. Shopify Balance is mainly for eCommerce businesses but is also pushing into retail with Shopify’s point of sale.

Shopify Balance may work for those selling products through their service, however, it is very limiting if you are not. Like all Wave products, Wave Money is designed for service-based entrepreneurs who transact mostly through invoicing vs. eCommerce or POS which gives your small business more flexibility for managing your finances.

Most would agree, you'll find enough reasons within Wave Money that you will never want to go back to traditional banking again.

By Jaxson Khan

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.

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