An honest one year review of american monzo 🇺🇸🇺🇸🇺🇸

[jamar0303 (Jason Y)]

I did want to come in and point to this:

@SebH

I would like all Monzo users to one day be able to have both US and U.K. accounts, as it would come in very handy in a variety of situations, but it’s probably unlikely to happen.

As something I’m a bit surprised Monzo wasn’t able to implement fully, when Revolut and TransferWise are both able to give me UK accounts (of sorts) as a US citizen and resident.

Also:

@SebH

In all seriousness, I do wonder about the check/cheque situation in the US. As you have explained, it’s obviously an essential feature over there, but as you’re probably aware (given you are so up on the banking market in the U.K.) it’s something Monzo have been very reluctant to implement here so I suspect they will probably feel similarly in the US.

At present it probably has something to do with the cost of making electronic payments compared to cheques. For example, I’ve got a small business. I have a bank account for it at Chase. They actually charge me $25 a month if I want to be able to send electronic salary or vendor payments, and that only covers up to 25 payments a month. That’s $1 each if I’m using them all. At the current scale of my business it would be $5 each (very small). On the other hand, I can order 2 boxes of 300 cheques each from Costco for a bit less than $34, which would cover at least two years’ worth of payments for my business, even with future growth accounted for.

If Monzo can bring its business product to the US and tackle that pain point (I’m hoping that’s something they’re looking at once they get their US banking license), I would be all over it.

To some degree, I think this exists with large companies as well. Practically every time I’ve gotten compensation from a business, it’s been paid by cheque. Travel insurance claim? Cheque. Damaged baggage paid for by airline? Cheque (American Airlines actually told me that they usually only send bank transfers to people living outside the US because every transfer has to be manually reviewed by Accounting whereas cheques up to a certain amount can be directly authorized within the customer service department). Overpayment on taxes? Cheque.

The above aside, there would also need to be a “cleaning up” of the fractured P2P payment landscape in the US. Right now there isn’t a universal, free system. Two major systems are currently integrated into banks right now, Zelle and Popmoney. Zelle is dominant but is still far from universal, and most challenger banks and many smaller community banks or credit unions don’t support them. They have a system of sorts that’s supposed to allow you to set up a standalone Zelle account with your debit card information if your bank doesn’t support direct integration but personal experience has shown that it doesn’t reliably work and standalone Zelle accounts can’t send money to each other. At least one party has to have integrated Zelle (built into their bank account). Popmoney is used by fewer banks, and those banks are allowed to apply fees to those transfers. The only truly universal system is wire transfer, and those aren’t cheap.

(And yes, there are Venmo and CashApp, but those add another layer of complexity and also seem to be growing into bank accounts, which might mean drawing back from providing transfer services for other banks’ customers in the future).

Hope that provides some more insight as to that.

@SebH

PS: My suggestion for free mobile check cashing, for you, would be to open an account with Charles Swarb (High Yield Checking, I think it’s called) as they have no minimum balances and no fees for most things. They will also give you a checkbook so you can dump your old-style bank if you want.

There’s a major catch with them (and why more people don’t bank with them)- they do a hard inquiry off your credit report, as if you’re applying for a credit card. It’s something of a mystery as to why they do this, but they do, and it does weed out some people.

Oh, also:

@melody

america is still a society built on checks and it bothers me so much how none of the no-fee or ebanks banks have even basic support for checks.

Have you looked into SoFi? They’re a no-fee e-bank and they do check deposit and checkbooks. New accounts don’t get ATM fee reimbursement, though.

[SebH]

@jamar0303

There’s a major catch with them (and why more people don’t bank with them)- they do a hard inquiry off your credit report, as if you’re applying for a credit card. It’s something of a mystery as to why they do this, but they do, and it does weed out some people.

Good post! I didn’t know about this, but over here almost every bank account records a search on your credit record for opening anything - ordinary bank accounts, as well as credit cards. I suppose it’s not so common over there, and from what I understand credit bureau data in general holds more weight over there so it’s an important consideration.

I hadn’t heard of SoFi before, but they sound good.

(By the way, the idea of post-dated cheques to pay for something seems crazy to us, as cheques are not a guaranteed method of payment at all so there would always be a chance that they wouldn’t clear - people would be hesitant to accept them at all for this reason.)

[jamar0303 (Jason Y)]

@SebH

I suppose it’s not so common over there, and from what I understand credit bureau data in general holds more weight over there so it’s an important consideration.

It’s not quite that, but rather that there are usually separate files for basic banking and lending. A credit report, as operated by one of the major credit reporting agencies (Equifax/TransUnion/Experian) would normally only be searched when obtaining some kind of lending facility (credit card, loan, credit line). Normally, when you get a bank account, there are separate files pulled, administered by ChexSystems and Early Warning (which also operates Zelle, the P2P payment network I mentioned in the other post). These are usually checked for excessive inquiries (if you’ve been opening “too many” bank accounts, which may indicate to the bank that you’re up to something, or simply that you’ve been bouncing from bank to bank for switching bribes, also not behavior they want to encourage) or derogatory notes (bank accounts gone into overdraft and then ignored, account closed due to fraudulent activity, like bad cheques presented or suspicions of money laundering). Schwab is pulling both credit and banking files even though you’re not getting any kind of lending facility from them (there’s been a hypothesis going around that it might be related to the margin lending facility on the brokerage account, but I’m pretty sure I asked to not have that when I opened my Schwab account and my credit report was hard-pulled anyway).

@SebH

I hadn’t heard of SoFi before, but they sound good.

They’ve been growing quite rapidly here in the US. They have a co-branded banking product with Samsung (Samsung Money by SoFi), they’ve acquired a company that specializes in “card issuance” and “digital banking solutions” called Galileo which actually says they count Monzo as one of their customers, and they’ve got a full suite of banking, lending (just launched a credit card, but they offered personal loans, student loans, and mortgages before that) and investing (both stocks and crypto) products. For people who can’t get approved for Schwab because of the credit pull requirement, it’s a solid next best choice.

[SebH]

Oh thanks for the detailed reply!

We have separate “fraud prevention agencies” too, which are also checked and are different files, but generally all banks will submit your data to both credit reference and fraud prevention agencies to record an application and check it for “inconsistencies”.

[thomasageorge (Thomas George)]

Thomas from the US team here (@melody we actually met at the NYC event with the “special” toilet…)

Firstly wow, this is an amazing review, thank you so much @melody for writing up such a comprehensive note!

2nd: you’re 100% right that we live for this type of feedback, so thank you for sharing it. I’ll use the opportunity to invite anyone else who wants to give their thoughts / opinions on our US product – please don’t hesitate to reach out to me or leave your thoughts here or just write via in-app chat. We read all the messages, even if sometimes we’ve not been as fast to respond as we should have been. Sorry about that.

3rd: Thanks for your kind words on our UI, pots (love your designs ) and on preferred names.

4th: Exciting news on cards coming soon! Cards with your name on (beautifully printed on the reverse) are coming soon – look out for a blog soon, and notification in the app inviting you to confirm your address so we can post the new cards out. Of course this means the end of being called “Monzo Beta”…

5th: We also have noticed more badly formatted square transactions recently and have been looking into it – hopefully a fix is coming soon.

And lastly, – this year has been tough, as I’m sure it has for many people, but we’re definitely still committed to the US market. Your list of suggestions in terms of what we need to focus on feels along the right lines, and I hope that 2021 will see us much more actively back on this forum, and being more transparent with you our customers about future developments. In the meantime don’t hesitate to reach out!

Thomas

[melody]

@SebH

I’ve never personally heard of anybody doing it.

i would say about 1/3 of the people i know in philly (who don’t have a job in tech) still have to physically go to a store to cash a paycheck. there’s a saying with food trucks that also applies to check cashing: the longer the line, the better (or in this case cheaper) it is. it’s also kinda been a norm for me until i started meeting people from the tech industry tbh

[ysconhb (Jenny Linson)]

@SebH

(By the way, the idea of post-dated cheques to pay for something seems crazy to us, as cheques are not a guaranteed method of payment at all so there would always be a chance that they wouldn’t clear - people would be hesitant to accept them at all for this reason.)

Without wanting to sound condescending here at all, as I have no idea what age you are, but perhaps you’re showing your age, or I fraternised with some dodgy characters, and perhaps was one myself, as people used to do post dated cheques all the time back in the day. It wasn’t at all usual to say to someone ‘here’s the cheque, there won’t be anything in there until Monday, so I’ve post dated it and if you can cash it after then it would be greatly appreciated,” As you say, the date was more of a guide for the person you were giving it to than anything, but generally they’d rather take one dated next Tuesday than risk losing the sale of the second hand car or whatever, and of course would have more details on you so if it wasn’t honoured knew where you were to come round and break your legs have tea and cakes, but it certainly wasn’t an unusual thing to do in my circles in the 80s.

A week or two is a little different to taking a years worth sure, but I do actually remember landlords getting deposits by post dated cheques, they’d have a pile of them, one from each tenant and then assuming you left the place as is and weren’t behind on the rent would either just hand it back to you, or rip it up in front of you at the end, The 80s were a strange time…

[SebH]

You’re right - I am too young to remember the 80s. Of course, I was vaguely aware that cheques were previously used much more frequently, especially in shops, etc with the cheque guarantee card. I had also heard of post-dating cheques but apart from your landlord example, I didn’t think it was widely done. But as I say, I didn’t live through the time.

I suppose what I really meant was that the current US situation would be unthinkable in the modern day U.K. - when we all have online banking, etc.

It’s basically back to the 80s, in some respects.

My comments about acceptance were also meant to refer to the modern day; it’s very difficult to get people to accept cheques now as the guarantee card has been killed off, the money doesn’t clear instantly and there are many other instantly-clearing options available.

[CanadianSpruce]

@SebH Honestly I just wish there was consistency in Canada. While with some words using the British or American spelling (like Tire) is ubiquitous, for others it just depends on the person writing it (especially for words ending in ize/ise) and don’t get me started on the dates. I used to work as an insurance underwriter and brokers would send in a request to make changes on a certain effective date (or a DOB for a new customer) but you’d have no idea if they wrote it was dd/mm/yy or mm/dd/yy.

Even the government can’t be consistent. On Alberta drivers abstracts one part would spell it Licence and another part would spell it as License on the same document.

[Anarchist (Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)]

@CanadianSpruce

On Alberta drivers abstracts one part would spell it Licence and another part would spell it as License on the same document.

Licence is a noun, and License is a verb in the U.K. (usually). Maybe Albertans are speaking English English?

[CanadianSpruce]

Yeah in this context It says Drivers Licence abstract at the top and then at the bottom it’ll say Drivers License abstract date requested (and then list the date).

[jamar0303 (Jason Y)]

@SebH

My comments about acceptance were also meant to refer to the modern day; it’s very difficult to get people to accept cheques now as the guarantee card has been killed off, the money doesn’t clear instantly and there are many other instantly-clearing options available.

Honestly, one thing that I’m surprised about here in the US is that we’ve never had a guarantee card system as far as I can remember. You’d think that a country so reliant on checks would at least try to make their use less of a leap of faith, but nope. You can individually have them certified, but a blanket “This card means that any check I write up to X amount will be paid, for sure” would have made the prospect of accepting checks a lot less worrying.

@CanadianSpruce

Honestly I just wish there was consistency in Canada. While with some words using the British or American spelling (like Tire) is ubiquitous, for others it just depends on the person writing it (especially for words ending in ize/ise) and don’t get me started on the dates

Yeah, I’m currently in BC and it’s kind of hard to wrap my head around. At least in the Vancouver area, though, it’s mostly American spellings aside from certain words like cheque, expiry, and colour. I’m guessing this changes further east. I’ve also noticed that a lot of the time, dates seem to be written with letters for the month to avoid confusion (especially on product expiry dates).

[CanadianSpruce]

@jamar0303 In Alberta its pretty much British spellings for everything except some words with ise/ize endings and tire. At least from my experience.

To be fair I don’t think most US merchants care if the cheque is good or not. Most are run through their merchant banks system and they take on the liability if the cheque bounces. The merchant gets their money either way. If you have bad chex report (kind of like a credit report for giving bad cheques), the merchant’s processing system will bounce the cheque regardless of how much money you have in your account.

[rdingwall (Richard Dingwall)]

@melody

though one thing that has bothered me are these generic all caps unenhancable transactions have been getting more frequent. recently, i noticed that every square transaction is like this (and that square transactions didn’t used to be like this!)

Backend engineer here - sorry about this! We shipped a bug fix on Nov 25 which should greatly improve this. It turns out we weren’t doing merchant enrichment for a bunch of common US transaction types that come through the Mastercard network - preauths, merchant credits etc Hopefully this should look much better now for new transactions going forward.

Thanks for writing such lovely (and useful!) feedback, we’re so lucky to have customers like you

[jamar0303 (Jason Y)]

I did want to ask, since I’ve also had some issues with “generic all caps unenhanceable transactions”- will it be possible to fix past transactions, or should we only expect to see improvements with new transactions?

[rdingwall (Richard Dingwall)]

@jamar0303

will it be possible to fix past transactions, or should we only expect to see improvements with new transactions?

Only new transactions I’m afraid

[hkotecha (Hitesh kotecha)]

@melody

for those not aware, my name is now monzo. as in monzo beta. at least to the merchants. using my monzo card really does bring to my attention how many merchants assume that the name on the card is your actual name.

I haven’t had this much fun reading an article here as this - so thank you melody or should I say monzo.

[hkotecha (Hitesh kotecha)]

The cheques thing is interesting. We’ve lost the ability to say “the cheques in the post” and thereby paying late to utilities etc. Direct debits has made it impossible to pay late. Is that a good thing(?)

Instant payment is probably a good thing at the low level (person to person) but unfortunately the big corporations don’t do it. They pay salaries once a month (I’m sure they would be happy with once a quarter). And they pay other business between 30 and 90 days which has 2 benefits for them - increase cash flow and earn extra interest. And yet we pay out instantly or on time.

Back to cheques, I also worked in Dubai (quite a few years ago) where you paid your rent with post-dated cheques and it was illegal to bounce a cheque. It was criminal offence- not sure if it’s still like that. Just saying…

[kylegturner (Kyle Gallacher-Turner)]

The preferred name part of this product is something that sets itself apart from others and was a wow factor for me… I work in the Credit Union space and our focus on DEI, specifically trans members is like a laser, however it can also be a laser once it hits a prism. Compliance, Operations, etc. can get in the way of simple things like eliminating dead naming due to ‘tax reporting’ and other various things. For the card this also is a benefit of Mastercard loosening rules on the name on a card vs. Visa who is still pretty reluctant to move from ‘traditional’ your-name-is-your-name type of attitude. For many this might seem like a small innovation but for those of us in the FI space in the US this is huge.

Still - Monzo with the small innovations that matter. Remote deposit and checks? That’ll happen. But eliminating dead naming and the reminder of that in a daily experience? Incredible.

[LushMelody (Jenna Ryan)]

This is a great review, and really informed me more about my options if I choose to accept the invite when I get mine (on the waiting list currently). I praise you for word vomiting all over this thread! Thank you

Side note: I so want to be friends with you after reading this!