The great draw of Monzo is the great exchange rate and lack of withdrawal fees overseas. I got my monzo card specifically for travel, and so did my girlfriend, and housemate. We have all started using them in London too now. I’d be interested in how many new users use their card overseas within 2months of joining. We both used our cards for ATMs because the places we travelled did not accept card at a lot of places.
I think an upfront fee that covers the year, say £20 on sign-up and then £2 a month ongoing fee after the initial year. Would be more palatable than introducing what amounts to as ATM fees.
We need to be aware of the scale of these charges. The prepaid card beta was anticipated to have maybe 80,000 users not 400,000 and so the ATM charges have multiplied exponentially. Monzo may have forked out a 7 digit sum to pay all our ATM charges. So clearly something needs to be done.
However IMHO if charges are significantly higher in some regions of the world than others this should be reflected in any fees. Fees should roughly be proportionate to the costs faced by Monzo so there is no say cross-subsidy of rest of world travellers by european travellers.
Option 1 reflects the fairest system of transparency without levying the fee for profit or penalising genuine users. However, if the concern is that sporadic users only sign up for an account to reap the benefits of fee free foreign withdrawals, you could implement an aggregated reward system that gives users a growing limit of fee free withdrawal reflecting their regular, profit making usage. This would in essence encourage account holders to use the card more frequently benefiting Monzo’s forward growth and in turn rewards its customers with the very benefits it seeks to deliver.
Ok, so I settled on Option 3 - it’s a nice introduction to a system of overseas ATM fees, shouldn’t penalise casual users who were drawn to Monzo for travel reasons - these people are not “offenders” or “abusing the system” as others have said - they saw a feature the liked and had a use for from a product that was marketing this feature highly - these folk are largely the original loyal customers of Monzo!
Option 3 will also dissuade these people from withdrawing lots of money, or “habit withdrawals” and encourage the cheaper and more accepted usecase of using the card in-store directly. When there is a limit, people will consider their withdrawals more.
I see the problem with the Option 4 suggestion of having a £2400 yearly limit rather than a £200 month limit - largely because I know this would benefit me (and typical travelers like me) more, and therefore there would be less money from the community to support the business as a whole.
The worst option 4 in my mind is the suggestion of a loyalty programme - a bank account is not a game, it’s not something to win bonuses and prizes through - it should be something steady that can be relied upon. Clear and simple, and when somebody asks “so what will it cost me to take out money abroad” the answer should not be “well, it depends…” - the answer should be short and succinct and clear to all. It should be inclusive.
For simplicity I like option 2 - it makes the answer to question I explained before a very simple “1.5%” or “£1.50 for every £100” it’s fair and reliable and easy for both customers and the team at Monzo to work with.
Although I think Option 3 sounds the best actually Option 1 is the most fair. Baring in mind that you can use your card abroad for purchasing things direct from shops and restaurants why withdraw cash. It’s unnecessary all you need is a small amount of cash which you can get in advance from the bureau de change for a competitive rate if you shop around and then use the card for everything else.
Lets help make Monzo successful so it can compete with the established banks.
Voted 3, however I’d much prefer that £2400 per yer allowance is rolled up, even if it takes a haircut…
£1000 of free withdrawals abroad,resets every 6 months.
It does not roll forward or carry and then anything above that is 2.5 - 3% globally. The system for this can’t be too hard to clone from the 5k limit on cash generally?
Also, shout out to those abusing the good nature at present, you are all why we can’t have nice things.
If you think Curve does exactly the same thing, you obviously signed up without reading the FAQs
There is a £2 flat fee for each cash withdrawal in a non-domestic currency. There are no other fees and a super-low conversion rate (an on-average equivalent to the wholesale rate plus 1%) is used
It’s true though that the fee-free withdrawals formed a large part of word-of-mouth marketing for Monzo, and there will be a lot of disappointment among those who signed up just for that benefit. As someone who spends a lot of time in “cash-only” countries I’m disappointed too.
But, unsustainable business models are unsustainable. Monzo is not a travel product first and foremost, and it’s unfair for people like you and me to expect everyone else to pay for our free withdrawals. Monzo have done the right thing in handling this situation in a transparent and open way, and their new offer will still be cheaper than legacy banks, and in most cases cheaper than Curve.
I’ve voted for option 3, but personally I’d prefer an annual cap - both amount and number of events. In that way, I’d hope the majority of customers would benefit from infrequent use, but still be able to access a reasonable amount in the event of an emergency, while those who make frequent use should recognise the need for them to make a contribution towards their costs, without disadvantaging the majority of customers or Monzo.
A few thoughts. If an Option 3 like method is chosen, some groups/people may still try to bypass the ATM limits/fees, since they are low compared to other methods of cash transfer. Methods used might include:
Concurrent misuse - Registering many cards/phones (automated like CAPTCHA farms)
Sequential misuse - Using a card only for ATM withdrawals, and then never using again, but applying for another account; repeat
Automated abuse could be particularly costly. Some sorts of things to monitor to detect mis-use of this sort might be:
Email address (pattern?) re-use
Phone number re-use
IMEI re-use (is that known?)
Device ‘fingerprint’ re-use (is that a thing like web browser fingerprint?)
Also geo-location clusters:
App download device locations
Card delivery addresses
ATM locations
Also withdrawal patterns:
Time from card activation to ATM withdrawal
Card delivery - ATM location pairs
Ratio of withdrawals to card-payments in each/all foreign countries.
I am sure the experts at Monzo can come up with better/other things to keep track of.
When the T&Cs are updated for the new rules, consider adding a clause to say that the free ATM amount can be withdrawn if the card is not also used in a current-account like way, but without being too specific so that individual’s circumstances can be taken into account whilst keeping the right to withdraw cards that appear to be being abused.
My initial thought was the £200 allowance but doing the math it would cost me £2-4 to get that out… I’m personally more than happy to pay that. The allowance option would cost Monzo thousands of pounds to spear me 2.
People could still missuse the allowance option and part of the problem sti’ll remains. Im not keen on Monzo tanking the hit for the sake of a couple of quid on my part.
Maybe there could be a loyalty card in the future for customers who have been with Monzo for a long time and haven’t misused the system that get offered an allowance of 1000 a year or something.
But I thought we were trying to find a solution for that “most people” population; the 87% majority? Why offer Option 3 as a solution to the problem of a “small proportion of customers generate a large proportion of the costs” if you know full well that it won’t make it fairer for the majority?
An amendment to Option 3, which is based on a biannual limit, has been suggested by several users. It doesn’t seem to be well-acknowledged by the Monzo team and I’m not sure why.
3% is no different to my current UK high street bank. So it makes it difficult to warrant a change full time to Monzo as one of the main benefits (like many others have said) is cheap / free ATM widthdrawls abroad. A free amount per year/ month then a small fee (1-2%) would probably please the masses. But 3% is just too much
