£100 minimum topup for Students?


(james_e_bell) #1

Hi,

Just referred a student to Monzo - they are balking at the £100 minimum topup however as dont have that much money to hand - have you considered lowering this for students?

James


(Saveen) #2

Good suggestion! £100 might discourage students from signing up.

Could a lower threshold be marketed via UNiDAYS?


(Si) #3

It’s unfair to just do this just for Students. There are lots of Adults on low income or on Benefits that need a Bank account but would also find this £100 initial Top Up a major Hurdle. Let’s think of everyone shall we ?


(Leon) #4

I agree I mean students already jump the queue, which to be honest is fine but what makes students more important then everybody else?


(Josh Bray) #5

I understand the importance of enticing students as they are the ideal market for banks. That’s why they offer incentives, once a student belongs to a bank, they usually stay with them for years.


(Cristian Randazzo) #6

Monzo is not a full bank yet. Everything has to be equal, for now… Students can have Student Financial and a job as well, an adult (me) just a job, even if I am just 20 and not a student, person same age as me and student could have more money then me actually, like my boyfriend does :joy: (Student finance and a job) cheers :v:t4:


(james_e_bell) #7

Take the point around fairness - though I wasn’t necessarily suggesting this should only be for students

To me, I see the £100 deposit as not related to incentives, but more a barrier that:

  1. Tests/forces a trust relationship with Monzo upfront
  2. Is significant enough amount of money that they will see the value of Monzo when spending that money (you are basically guaranteeing transactions unless the person really has £100 to spare)

I guess there is actually another barrier here too though which is how likely is someone to have £100 in order to make the initial deposit (I guess this would also influence that trust point - e.g. do I trust this startup bank with all my disposable cash at this point/some of it etc) which would vary based upon peoples circumstances

I guess it is for Monzo to see from the market how much of a barrier that is and whether it is preventing different groups of people joining who would otherwise have joined. If its a particular problem for students too I guess they would see through the campus outreaches fairly quickly.


(Samuel Nogalski) #8

I was thinking I’d struggle signing up with a £100 amount but that was before I had realised the £100 was still actually mine to spend after I had put it into Monzo. In a case of trust, it’s a bit more difficult to potentially be parting with £100.


( related to Monzo CEO, Investor in Monzo ) #9

a serious question - why did you not realise the £100 was still yours to spend - Monzo had a lot of this misconception with the iPhone app sign up - the message is clearly not getting through to some people


(Leon) #10

I know and understand that but don’t we all so what makes them so important? 80 plus per cent of us stay with the same bank even though the service is poor. The real reason is that they more then likely will be earning quite a lot of money in the future and big (and small) banks want a piece of that.

Which is fine but extremely short sighted as students want free stuff. Now free stuff has got to be paid for from somewhere. It’s paid for by the rest of us having crap rates of interest on balances and less then favorable rates on overdrafts. While of course students have their overdrafts interest free. Do I think Monzo should be actively be chasing students the way they are? No to be honest, walk before you can run. I guess Monzo wants market share but that just means the current accounts are not going to be as great (rates wise) as it could be.


(Alex Sherwood) #11

This (& giving the card away without the requirement to top up £100) is known as a loss leader & you don’t have to pay for it because the extra profit that the banks make of students cover the costs.


(Samuel Nogalski) #12

I didn’t realise the £100 was mine to spend because you have to use your card to technically spend £100 and then wait a few days to receive the cardbefore you can spend it again. That, and I am currently banking with RBS for my main banking so it looks strange having £100 less than I thought I would’ve had in there too.


(Leon) #13

That’s from a bank that charges fees for student accounts. Since we all will have the same account at the start I don’t think the above applies, not unless they will have one for students and another for the rest of us. Now that would grate but could happen. I hear what you are saying but to earn money from students they will more then likely have to have less favorable terms on their current accounts then the average user and then most students will of course stay away. It’s a balancing act.


(Alex Sherwood) #14

Monzo will soon earn fees from students (& the rest of us in the form of overdrafts) & who are some of the heaviest users of overdrafts?


(Leon) #15

Ah even then there’s a problem. Most student accounts offer fee free overdrafts or interest free overdrafts on part of the balance or both. Let me make something clear I don’t have any problem which Monzo offering a account for students, I just think it’s way too early for that. Like I said all the free stuff has to be paid for somehow. Like all loss leaders it’s normally everybody else that pays for it. (In one way or the other.)


(Alex Sherwood) #16

Right but I’m willing to bet that for now Monzo’s overdrafts won’t be interest free for students or anyone else.

At this point, Monzo needs to start earning revenue from it’s first product, overdrafts & in the short term, can’t afford to offer that type of incentive (which in terms of the opportunity cost, costs a lot more than waiving the initial £100 popup & having some students not use the card at all), just to sign students up for revenue that it’ll start realising in a few years time.

Anyway, we’ll see what happens, let’s leave this here.


(Angus Pearson) #17

For what it’s worth, student overdrafts are usually interest free with few strings attached - if anything us students are high risk and somewhat irresponsible people to lend money to. Big banks do it I assume to gain your loyalty so you stick with them forever as you hopefully move on into a high income job (optimistic…).

I’d guess the £100 up front is for some technical reason, as the rest of the UX is well crafted enough that the Monzo team will be well aware it damages on boarding and is prohibitively high for some potential users. Also at the moment most students should have enough cash to front the £100 as we’re only at the start of the academic year


(Leon) #18

Yeah let’s see how things turn out. It was great having a discussion with
you. :slight_smile:


(Si) #19

No offence but your a shareholder so it’s all about the Dividend perhaps. I like to think this is a community bank for all the community . I take your point about students stating but let’s also include other worthy Demographics like disabled customers on PIP etc & people on Benefits , maybe even throw in a few pensioners for luck? Let’s be like the Community Bank not the So called Co Op bank.


(Si) #20

WELL SAID! Couldn’t of put it better myself