Barclays begins SME account consolidation

Barclays is consolidating all of its 500,000 business current account customers onto one of two new payment plans, launched in May 2013, with a minority of customers facing a significant hike in banking fees as a result.

The move, which will start with a pilot of 20,000 business customers in the North West before a national roll-out through 2014, follows the launch of Barclays' Mixed Payments Plan and e-Payments Plan accounts in May 2013.

All new customers since this date are already on the new accounts and the next phase of the consolidation will see all pre-existing Barclays customers moved onto one of these two plans.

Barclays said the purpose of the move was to improve transparency and fairness in relation to account fees and discounts, which the bank said had not been applied uniformly in the past, meaning some firms benefited more than others.

The upshot is that while some 66% will either be better off under the new plans or pay no more than £1.50 more per month, the remainder will pay more with around 3% facing an increase in their monthly fees of more than 20% or £25.

Barclays said that customers in this bracket would have the increase in their fees capped to 0.5% of their monthly account turnover.

A spokeswoman for the high street lender said: "Despite the diversity of our business banking customers, they overwhelmingly tell us that they expect a simple, fair and transparent approach to banking.

"This feedback led to the launch of two new Business Current Accounts which we launched in May 2013 to an overwhelmingly positive response."

Barclay's Mixed Payments Plan is said to be for businesses that mainly use cash and cheques to make and receive payments, while the e-Payments Plan is designed for businesses that mainly receive electonic payments and use online banking and debit cards to make payments.

Barclays said it would continue to offer new banking customers free banking for the first 12 months but that this fee holiday would not be extended as has been the case for some customers in the past.

Discounts will be applied uniformly, in accordance with a transparent loyalty reward programme that provides a discount of between 0-50% depending on monthly account turnover and length of time with the bank. See Barclays website for full details of account fees and discounts.