As Monzo begins introducing savings and current accounts, I’d opt for a system that rewards the most active users. For example, if I have Monzo current account, savings account, credit card (hopefully in time!) and any other services you’re considering introducing, then the free monthly allowance should vary depending on your use.
For anything above that, why don’t you just pass through the ATM costs? It would be great to have more insight into who charges what - because you can encourage users to choose the cheapest ATM provider. Even if you could have some tool to check this before you withdraw would be great. We all know that those shady cash points in convenience stores are the more expensive! For example, if I make a withdrawal at a Bank of America and it costs you 2%, whereas a Citi Bank costs 1.5%, I’ll go back to Citi.
Alternatively, a membership option with a monthly fee and other benefits is a good idea. As a fallback, charging 1% for ATM withdrawals in Europe and 2% for the Rest of the World seems like the fairest option above a free allowance.
As with some comments above, notifications of “overuse” and “limits” are important.
Just make sure you research and position Monzo competitively. Nationwide are one provider that offer free cash withdrawals worldwide with a current account and a credit card that offers free foreign purchases with no limits. One of the key to Monzo’s success has been because it’s considered a great travel card - but why would I use Monzo if I can get the benefits elsewhere? I can forego the Monzo app and all of its features if I’m saving a small amount of money.
Also consider looking at Revolut and Curve. Revolut has a Premium Membership and Curve allows you to pass through charges to a current account.
I’m one of the Monzo users who uses it heavily abroad, but is guilty of not using it in the UK. The main reason for this is because it’s not a current account - yet - and I’m not a fan of having to top up every time - especially where other pre-paid cards like Curve make this process a lot easier.
I can’t wait to go “all in” on Monzo with my banking. You’re just not there yet. If you time this wrong, I’d be inclined to use my Monzo less rather than more.