So I’ve been reading through the Monzo Plus thread, popcorn in hand, and I suddenly thought- would anyone want to see paid tiers of Monzo with additional benefits come to the US, or are people happy with just one free service for everyone?
Three things brought this to mind:
The majority of existing prepaid card programs already charge monthly fees for essentially being a basic bank account. Clearly, some people are willing to pay these monthly fees just to have some kind of access to the banking system, so why not offer a paid tier that actually provides value for money?
Also, Revolut launched in the US with paid tiers, and apparently their Metal tier is getting enough people that the US version is now putting people on a waitlist (when I first re-opened my account with a US card I was given the option of Metal if I wanted to pay, now when I check the app it just asks me to “reserve” it). Granted, that could be demand for the metal card itself, not just the additional benefits. Still, it says something.
Additionally, I’ve got a couple of friends who don’t like using credit cards much and would like to stick to their debit cards were it not for some of the additional benefits (purchase protection, extended warranty, baggage, delay, cancellation insurance on air tickets, rental car/car hire protection) that credit cards provide, and I realized that for those kinds of people, a paid tier of Monzo priced similarly to a travel credit card (so $100 annually or a bit less) with those travel benefits (and possibly a basic level of cashback rewards like the 1% reward Discover provides on its debit cards), but on a debit card would be a relatively easy sell.
I’m curious to see if anyone else thinks this could work.
In regards to Revolut, I think they have you reserving Metal due to lack of cards. I just got into the beta a two weeks ago for the US and even the basic cards are sold out. So I still have no option to even order a card.
From my perspective, though, it seems like the more closely you look the more you do find premium accounts, at banks at least. Credit unions are the only place where the majority seem to not have any paid tiers. Every major bank has at least two tiers of checking account (Chase with the base checking, Plus checking, and Sapphire banking, Citi with Access checking, Basic banking, then the “Citibank Account”), and some regional ones do too (for example, SunTrust has both regular checking and a paid premium account that earns Delta miles, and TD Bank has both Convenience checking and Premier checking). To say they’re not a thing isn’t quite true, and the fact that these banks haven’t ditched them indicates that there’s a market for them.
The other side of that is that free accounts really don’t seem to be as rare a gem as that nowadays. If you’re OK with weaker online services there’s probably a credit union and/or local bank in your area that offers free checking. If you want something more online-oriented there’s already SoFi, Aspiration, Chime, Varo, and Dave. And of course there are also the brokerage cash management accounts that can basically stand in for checking accounts. All that isn’t counting that Monzo isn’t the only fintech coming across the Atlantic to give the US a go- N26 and Revolut are also here now (though not quite as polished). If you want to do your banking at an insurance company, there’s State Farm. If you need to be able to do cash deposits at a retail store, there’s Bluebird which can be deposited to at any WalMart.