for Monzo to swallow a seven figure sum (which will increase substantially as new accounts are opened) it is not viable and they need to take this action. But it is best to do it when the current account launches (it is in preview at the moment) rather than back track some months later and have valid accusations of bait and switch
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Probably not, but it just feels weird to me… If building up that allowance is something displayed prominently in the app I could see it presenting conflicting messages to users.
If you get a notification when you unlock your allowance, I would interpret that as “well done, you’ve spent money!”
And if you’re already close to the next £1000 mark and have a holiday coming up, maybe you’re more likely to buy some things you don’t really need, or make some purchases that you would otherwise be better off delaying.
Thanks Monzo for asking our opinion on this, much appreciated.
I believe the answer to this question also depends on where Monzo wants to see itself in the future, an alternative banking platform or just an alternative travel card (I am aware of the ambitions for the former).
Option 3 (£200 free monthly ATM withdrawal and % fee thereafter) seems to be the prevailing choice, at least for the time being, of the Monzo community.
Echoing earlier references to the concept of loyalty and Monzo’s ambitions of creating an alternative banking platform, why not implementing Option 3 but increasing the fee-free monthly ATM withdrawal limit for the holders/active users of Monzo Current Accounts (after being rolled out to everyone later this year).
To be honest, in the case of plain Option 3, I would personally not be tempted to use Monzo as my main Current Account. I will just weigh Monzo against its rivals and continue/discontinue using it as one of my travelcards.
In case of an incentive based on loyalty, however, I would seriously consider switching my current account to Monzo.
At the end of the day, banks make more money out of their current account customers, right?
Sorry if similar views were circulated before, but I could not help posting immediately after reading first 50 or so entries 
All the best,
You would be surprised… not everybody travels to hotels, resorts, or places where card terminals are widely available…
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Someone has to pay for the machine to be there to start with.
These cost money to run and maintain.
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I got a Monzo card originally because I was going travelling to South America and didn’t want ATM fees or foreign purchase fees etc . . . .I also took Revolut and Virgin money cards for the similar reasons. .Revolut and Virgin increased fees during my travels and I stopped using them both. In fact I have thrown away my Revolut card as it served its short term use. I felt Monzo was different and saw myself using it after my travels unlike Virgin and Revolut namely because with Monzo my withdrawal limits were increasing at a time when Revolut and Virgin were reducing theirs and increasing their fees. I liked it because if seemed different to the others. My point being my experience got better the longer I stayed with Monzo were as with Virgin and Revolut the experience turned uninteresting as soon as the unimaginative “initial low fees” promotion ran out. I actually went further and invested in Monzo so I definitely want this business to be sustainable! I just hope it retains it individuality and rewards its early adopters and investors so here is my idea for Option 4.
Existing Customers and Investors to date retain Free ATM abroad fees
All new Customers, from a certain cut-off date * have the option of either paying as 1 – 2 % costs as described in option 1 or option 4 which is free ATM fees abroad but receive tailored adverts based on spending habits through the app.
(*the cut-off date would be to get as many users that would equate to the advertising revenue negating the cost of ATM fees.)
You have real time live data on spending habits which even with a small client base is going to be interesting to advertisers.
Option 4: Nothing free, charge us what it costs Monzo.
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Hi
The main driver should be a great UX and easy to understand. You may have covered why the following idea isn’t possible but there was too much to read so I skimmed it…
What about nominating 1 currency (or 1 country for the EURO if that is challenging) for free that you can take £ out from
A second country has a small fee
A third a larger fee
And so on
That way you only capture the people who are “misusing” the system, or have optimised it for their own benefit, and not those genuinely using Monzo…
I too, as many readers are, am grateful to you for explaining the fee structure and the issue you face, and for inviting us to be part of the decision process.
I was intending on being one of the ‘culprits’ here - I have recently got my Monzo card and was intending to use it almost exclusively abroad. Although this might change when the current account launches and Monzo is protected by the FSCS.
During my recent European holiday I mainly used the card for purchases, and only withdrew cash for those who didn’t accept card (I’ve just checked my app - £335 of cash withdrawals). If there had been a monthly limit in place, I think I would have continued to use my Monzo card (ahead of my completely fee-free credit card) and been more attentive to how much I was withdrawing. I have voted for Option 3 as it would be the best solution for me and it feels right to have a fair-usage amount. I gather that you have done the maths and are satisfied that this would satisfactorily reduce your cost per customer - I assume there are some ‘excessive withdrawers’.
However, and despite the fact it would not be the best solution for me, I think a form of reward to regular users of the Monzo card supports the intention of Monzo of being an all-round banking solution. It would discourage the likes of me to use it purely as a travel card, and perhaps encourage us to use Monzo more often and more regularly. On the flipside, I can understand the moral issues with encouraging users to spend on the card to reach a ‘goal’ when they otherwise wouldn’t.
Whatever the final decision, I appreciate being informed and included. That alone will encourage me to use Monzo more often. Thank you.
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The least bad option is Option 3. Giving a free allowance.
But, since your objective is to become number 1 card for every use, why not incentivise it?
Your business model is based on card purchases on shops and online, at home and abroad, and you want people to shop with your card as much as possible anywhere they are. You want them to pay with your card abroad, at home and online whenever it is an option instead of using cash or other cards.
Why not to give an extra withdrawal bonus for every pound you spend shopping with your card? You would have to make the numbers, maybe 1 pound extra withdrawal for every 5 pounds spent on card? or maybe 1 pound for every 10? or even every 20? Whatever it is, it will help and increase the use of Monzo from your users.
This bonus could be valid for up to a year or work for the natural year for expenses made that year; as free extra withdrawal allowance.
This seems to be one of the fairest options to ‘reward’ the frequent users.
An annual allowance would be my preference too - and actually better for Monzo as if you went away 12 times and used £200 each month it would equate to £2400.
This way it still encourages you to take cash away to limit the impact on other Monzo users but is a bit more useful if you are abroad and need cash. £200 is not going to go very far for someone who goes away 3 or 4 times a year.
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Make £2400 as an annual max before charging fees.
£200/month * 12 months = £2400
I just visited Spain, where most places accept card payment, so I didn’t need to withdraw any cash. In July I visited Germany where most places don’t accept card payment, and I had to withdraw 300 euros. Making the free from fee amount annual would be fairer for people that use the card like me.
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I’m afraid there is no such thing as a free lunch so for the bank to be sustainable it needs to pass on the cost of using non UK ATMs. I’m currently using my card in Singapore, it works well and withdrawing cash is quick and easy. I will be using it in France in a couple of weeks, it will be very interesting to see if it works at mororway toll booths as these can be very “French” if they don’t like your card.
I also want to pose another question, am I one of the oldest Monzo users? I know most customers are millenials but I’m knocking 60, anyone older?
I see, thanks again! It might still be nice to link the rate in some way to
what the ATMs are charging. Appreciate that’s hard. Do ATMs charge a fee in
the UK too?
Hi, first time on this forum but this seems to be quite an important topic and I’d like to contribute.
I use my card at home and abroad regularly. I also take my phone with me and my phone provider will text me with the call and data rates of the territory I’m in.
I see option 1 as being the fairest way of users paying for fees when abroad, and the 1 or 2% is considerably cheaper than the examples provided by Monzo in the blog post.
However, could these charges be made direct charges and could users be made aware of the charges they will pay on arrival/on first payment when abroad? At least in the mid-long term this seems to be the fairest option, we pay our way according to need and Monzo don’t lose out or charge a transparent fee if this is necessary to the business model.
I see some comments which suggest that more frequent users or UK users should gain benefits as rewards for use but I would prefer to use a bank which had a fair usage policy from the ground up for all account holders and didn’t have changing rules for different types of user. This is one way Monzo could be different to other banks.
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Yes they do charge in UK too but (a) where banks own their own ATMs they offset each others charges, (b) it is lower charges than outside UK not only for the ATM use but network charges too so easier for Monzo to absorb those charges
It seems to me Monzo with option 3 would be happy to continue funding a limited amount of atm fees for the majority of users out there… The large bill they currently face would be slashed though. The top end users clearly drive the monzo bill. The behaviour change is targeted at them, they are the ones who would change (in a business positive way) all the while retaining the travel friendly element of Monzo for the majority, which is probably worth the investment at Monzos end.
Options 1 and 2 seem to simply spread all the costs to the customers, which loses the travel friendly marketing they currently receive.
Youre right these choices arent made in a vacuum, but monzo receive upside when they allow a certain amount of free travel money in their product proposition.
Option 4 : Don’t charge for the use of ATM abroad.
I have a funny feeling that its not that transparent, yes some people maybe exploiting the ATM use but you’re telling me your company can’t fork out £16 pp ? the whole reason why this card is attractive is because it doesn’t cost money to take cash out abroad.
Who’s to say your next vote isn’t going to be we are now charging to use the card on smaller card transactions abroad, and then we are now capping your month ATM withdrawal in the UK.
Options 1 and 2 don’t lose the travel friendly marketing entirely, as using the card at POS is still the same as it ever was.
Speaking for myself, I’ve never used any of my cards to withdraw cash from an ATM when I’ve been abroad, I’ve always sorted out any physical foreign money I’d need before travelling.
Whichever option Monzo go for, I wonder if they could supplement it with an incredibly straightforward travel guide - in that you say you’re going to country X and the guide says if the country widely accepts Mastercard at POS or if you need cash, and perhaps encourages you to arrange it before leaving the UK.
For the record, I’m very much in the minority as I voted for the 1.5% option, because it’s the most straightforward and easy to remember for me. It’s also one of the two options that strongly encourages the card to be used at POS rather than an ATM, which to me makes a great deal of sense - a big driver behind my getting a Monzo card was wanting to become cashless. Though I accept that there are countries out there which don’t take Mastercard at POS and therefore my experience is somewhat limited.