Account fees that keep rising, admin that still needs an appointment, a branch open during the same hours as your business: many freelancers and small businesses are looking at neobanks. The idea is appealing. An account opened from your phone, cards for the team, transfers tracked in real time.
Yet the word covers very different realities. Behind a neobank there can be a bank in the legal sense, a payment institution or an electronic money institution. Here is what the term covers, what changes with the status, the advantages and limits for a business, and how to choose.
Key points at a glance:
- A neobank is a provider born digital: the account is opened online and managed in an app, with no branch network.
- The word is commercial, not a legal status. Behind it are credit institutions, payment institutions or electronic money institutions.
- Only a credit institution may suggest it is licensed as one, under Article L511-8 of the French Monetary and Financial Code. Its deposits are covered by the deposit guarantee fund; the funds of an electronic money institution are protected by being kept separate, or by insurance or a guarantee.
- For a business, four points matter: the status, the IBAN, the tools and the price.
What is a neobank?
In everyday use, a neobank is a financial services provider designed for mobile from the start. What does that look like in practice? An offer where the account is opened online in a few minutes, the card arrives by post and everything is run from an app, without visiting a branch.
What is a neobank day to day? An account with an IBAN, one or more cards, notifications for every payment and settings available in one tap, such as blocking a card or changing a limit. The first offers targeted individuals. Accounts for freelancers and businesses multiplied later, with invoicing and expense management tools.
Neobank or online bank: what is the difference?
The two terms sound alike, but they do not mean the same thing. An online bank is generally the digital offer of a credit institution, often a subsidiary of a traditional banking group: it offers accounts, loans and savings, without branches. A neobank is a mobile-native player whose status varies. The difference between an online bank and a neobank therefore lies less in the app than in the regulatory framework. To choose between an online bank or a neobank, look at the status and the services actually offered rather than the name.
Neobank: a commercial name, not a status
The word neobank has no definition in law. What matters is the provider’s licence. Article L511-8 of the French Monetary and Financial Code prohibits any company other than a credit institution or a financing company from using a name, advertising or expressions suggesting it is licensed as a credit institution, or from creating confusion on this point.
In practice, three statuses come up. A credit institution takes deposits and can grant loans. A payment institution provides payment services, such as transfers and cards. An electronic money institution issues electronic money and holds payment accounts. Each follows its own rules, in particular for protecting customers’ money.
Day to day, the difference is barely visible. A payment account is used like a current account: it has an IBAN, receives transfers, accepts direct debits and works with a card. The gap lies mainly in the services around the account, such as credit or savings, and in how customers’ money is protected.
| Status | Can offer | Protection of funds |
|---|---|---|
| Credit institution | Deposit accounts, loans, payment services | Membership of the deposit guarantee and resolution fund (Article L312-4 of the French Monetary and Financial Code) |
| Electronic money institution | Payment accounts, cards, transfers, electronic money | Funds kept separate from the institution’s own, held in a distinct account with a credit institution and protected against other creditors, including in insolvency (Article L526-32 of the same code), or covered by insurance or a guarantee |
Checking a provider’s status
The status appears in the website’s legal notice and in the terms and conditions: company name, type of licence, the authority that granted it and the registration number. Supervisory authorities also publish registers of licensed institutions. A payment account opened with a payment or electronic money institution is not a deposit account, and it is this status that determines the protection that applies.
Many providers active in France are licensed in another EU country. They remain supervised by the authority of their home country, and those that open a branch in France are also supervised by the ACPR for part of their activities. The legal notice states both, which tells you where to turn in case of a complaint.
Key takeaway: the word neobank says nothing about the status. The legal notice shows who provides the account and how customers’ money is protected.
Neobank, online bank or traditional bank?
The three models meet different needs. The table below compares the points that matter for a business, without targeting any particular offer: details vary from one provider to another and can be checked in each price list.
| Criterion | Neobank | Online bank | Traditional bank |
|---|---|---|---|
| Status | Varies: credit, payment or electronic money institution | Credit institution | Credit institution |
| Account opening | Online, from the app | Online | In branch or online depending on the institution |
| Branches | None | None | Branch network |
| Tools for businesses | Often built in: invoicing, receipts, exports | Vary by offer | Vary, sometimes as an option |
| Credit and overdraft | Depending on the status and the offer | Offered depending on the file | Offered depending on the file |
Many businesses in fact combine two accounts: an online account for everyday operations and a credit institution for a loan or specific needs. Nothing requires you to keep everything in one place.
Business neobanks: which businesses are they for?
A business neobank mainly targets freelancers, micro-entrepreneurs and small companies that want an account that is simple to open and run. For a business, the criteria go beyond the price of the card: you need an IBAN to collect payments from clients, cards for staff, exports for the accountant and, increasingly, an invoicing tool.
Choosing a neobank as a professional also depends on the activity. A communications agency paying for online subscriptions does not have the same needs as a shop that takes cash or a craftsperson who still receives cheques. Before opening an account, list your business’s operations over a typical month, then check that the offer covers them all.
For a team, also look at access management: named cards for each employee, limits that can be set card by card, separate access for the director and for the accountant. These features save time every month, far more than a few euros’ difference in the subscription.
Advantages and limits of a business neobank
A business neobank simplifies many tasks, but it does not always replace all of a bank’s services. Both columns are worth reading before you switch:
For a freelancer who invoices online and pays mostly by card, the advantages often win. For a shop that handles cash or a business that needs financing, the question of status and available services deserves a closer look before moving all its flows.
How do you choose a business neobank?
Four checks are enough to compare offers on a solid basis, whatever name is shown on the home page.
Read the legal notice: type of licence, supervisory authority, country of establishment. This determines how funds are protected and which services are possible.
Look at the monthly price depending on the billing basis, then the usage fees: extra cards, international transfers, withdrawals.
French IBAN for clients, invoicing, cards for the team, exports for the accountant: check that every need on your list is covered.
Prepare your ID document and the business’s supporting documents, then apply. Keep the old account while you move the flows across.
In short: the status, the usage fees and the tools matter more than the name. An application prepared with its supporting documents then opens quickly.
Once the account is open, keep the old one for a few weeks. Vivid recommends planning a transition period of four to eight weeks so that incoming payments arrive reliably on the new account: time to notify clients, move direct debits and check the last due dates.
Vivid, an online business account
Vivid offers a 100% online business account. Payment services are provided by Vivid Money S.A., an electronic money institution licensed and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg; Vivid is not a bank. Customers with a French IBAN are served by its French branch, supervised by the ACPR.
As with any provider, Vivid’s status can be checked in the website’s legal notice: the company, the supervisory authority and the registration number with the CSSF are listed there.
Vivid in brief: an online business account provided by an electronic money institution licensed by the CSSF, with unlimited French IBANs, invoicing included and plans from €0/month.
A business account run from your phone
With Vivid, the application is online and takes about 10 minutes, with unlimited French IBANs and invoicing included. The Free Start and Standard plans cost €0/month.
Frequently asked questions
What is a neobank?
It is a financial services provider born on mobile: the account is opened online and managed in an app, without branches. The term is commercial and does not correspond to a specific legal status.
Is a neobank a bank?
Not necessarily. Some are credit institutions, others are payment or electronic money institutions. Only a credit institution may present itself as such, under Article L511-8 of the French Monetary and Financial Code. The provider’s legal notice shows which category it belongs to.
What is the difference between a neobank and an online bank?
An online bank is generally the digital offer of a credit institution, often a subsidiary of a banking group. A neobank is a mobile-native player whose status varies with the licence it holds.
Is my money protected with a neobank?
Protection depends on the status. Deposits with a credit institution are covered by the deposit guarantee fund. The funds of an electronic money institution are kept separate from the institution’s own and protected against its creditors, or covered by insurance or a guarantee.
Is a neobank suitable for a business?
Yes, provided it covers the business’s needs: an IBAN for clients, cards for the team, invoicing, accounting exports and, if needed, cash deposits or paying in cheques. For a mostly online business, these criteria are often met.
How do you check a neobank’s status?
Read the legal notice and the terms and conditions: they show the type of licence, the supervisory authority and the registration number. Authorities also publish registers of licensed institutions. If in doubt, customer service should be able to state the licence and the competent authority.
Can you get an overdraft with a neobank?
It depends on the status and the offer. An overdraft is a form of credit: check in the terms of each offer whether it is available and on what conditions before opening the account. A business that needs a cash advance can also keep a relationship with a credit institution.
This article is general information only and is not legal or financial advice. The legal texts quoted are those in force on Légifrance at the time of writing. Payment services are provided by Vivid Money S.A., an electronic money institution authorised by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg, whose French branch is supervised by the Autorité de contrôle prudentiel et de résolution (ACPR).
