No, because most people’s travel is sporadic. Our average customer maybe goes on 2 or 3 trips a year. In theory it’s possible to get £2400 of free withdrawals in a year, but in reality it’s pretty unlikely that the normal customer would withdraw £200 every month for 12 months.
You said that a minority of the users use the cards just to benefit for the 0% commission ATM transactions abroad and when they come back to the UK and stop using Monzo.
How about the ATM transaction allowance abroad to be proportional to the use of Monzo and spending domestically (UK). So loyal users will be rewarded and usage & retention will skyrocket as they directly benefit from using Monzo in the UK. And this acts as a fail safe mechanism for people who exploit Monzo by solely using it abroad.
Clearly as a business you have to charge a certain amount to offset these costs, it’s been fun while it’s been free and investors have been picking up the tabs (the big boy investors not us little crowdies)
£200 seems fair… Revolut have similar costs but I believe for all ATM withdrawals.
This should drive all of us to use our cards more in retailers than taking out cash and then spending it…
Some countries cash is king and, well, we’ll just have to wait for them to catch up
I’d imagine that the average user would likely be withdrawing less than £400 at international ATMs annually, in which case option 3 will work out cheaper than option 2 for most people.
If you guys aren’t making a loss on that then it’s probably going to keep the majority of people happy.
Option 4, for every £1000 spent in the UK you get an extra £200 of charge free withdrawals abroad. Therefore those using the card consistently in the UK benefit and those who aren’t don’t
Maybe if the chareg was exactly whet the charge was to Monzo for the cardholder’s withdrawal? Is it like 0,20€ per transaction in Germany or something similar?
Most of Western Europe but Germany is a problem for using MasterCard in shops, bars and restaurants - even in the big cities of Berlin, Hamburg , Munich and Cologne… They love cash so I always end up at an ATM when there.
I’m not sure how easy something like this would be to enforce fairly. It also feels a little at odds with our commitment to find a solution which works for the community as a whole, rather than targeting specific groups of users.
We’re moving to an ever more cashless society, and a motivator for this would be to limit free withdrawals to £200. That’s more than enough to pay for the odd taxi or restaurant that doesn’t take card. 3% after that is reasonable given the cost to Monzo.
Option 1 is the most sensible. It has already been noted that the current policy has likely changed the way people use the prepaid Monzo card. Any policy change will also have a corresponding behaviour change (when viewed in the round over many customers). The best policy would therefore would be the one where there is no net impact upon business costs from any drift in usage into the future.
An honest charge based upon real costs would also underline the values of the Monzo banking business.
Just 13% of customers account for more than 85% of our total ATM costs in any given month. Many of these people signed up to Monzo because of the great exchange rates and fee-free ATM withdrawals abroad, but don’t keep the card once they’re back in the UK.
What about offering a better rate or higher free allowance for people that actually use your card as their main card as you get percentage from each card payment.
Fe: For £1000 spend on a card you get a 1 free atm withdrawal abroad.
Really like options 1 & 2 – because they are simple and straight forward to get onboard with RE mitigating the cost to Monzo. Ultimately I went for option 1, because I’m likely to travel to the EU more than I am to far away exotic locations outside the EU – suspect that is probably true of the average Brit, and therefore while option 2 makes sense as I mentioned above – I would still kind of be subsidising people that travelled to those exotic locations more frequently than the average.
I thought option 3 was interesting – my only question to Monzo would be whether that’s financially sustainable – in the same way that options 1& 2 appear to be? You could easily imagine a scenario where people travelling together pool their £200’s so they don’t go over their limits and Monzo doesn’t actually recoup as much of their outlay?
I was thinking along the same lines for the future - maybe you could earn Monzo goodies by using your account frequently - a goodie could be a credit towards overseas ATM costs.
In the short term though I like Option 1 - it seems simple, transparent and fair.
A loyalty system is by far the best option here.
Ultimately its a great UK current account with free international purchases (better than most) but it’s not fair that the minority are costing an unfair amount. It’s a current account for the UK that happens to have excellent international rates (better than the travel cards in my opinion), not a prepaid travel card.
To those of you moaning, the figures speak for themselves and are clearly unsustainable in the long run, just pay with your card.
I fully support this effort
Best option by far! Presumably you will make money from regular account usage to cover the ATM abroad fees, and this way you will also align the incentives of people getting Monzo. Your customers should want to use it to bank with in the UK too and not see it as just yet another travel only card.
If Monzo is anticipating 2-3 withdrawals a year, then why not make it £600 yearly allowance? It also feels not like genuine “we have our users in mind”, if Monzo is offering an option that you know that most customers won’t benefit from.
How do you get this to work without penalising people with not all that much money, though?
Revolut’s fees are:
Free up to £200/ €200/ Fr200/ 800zl (or currency equivalent) per month. A 2% fee applies thereafter
if withdrawing £1500 costs £30 per year then why not charge just that? Why not pass on the exact charges to the users rather than a percentage? I think that would be fairer and more transparent.