I like the freemium model where you pay a monthly fee in exchange for certain features because in 2017 we’re used to it and have subscriptions for a lot of things. Personally, I subscribe to Apple Music, Amazon Prime, Evernote, Anylist, and more, and contribute a monthly sum to artists on Patreon. This model would make it easy to budget, and there would be no surprising fees later on. Additionally, it would be easy and clear to advertise (“all this for the low monthly fee of X”). The problem with normal banks are all the little and often unexpected fees that are attached to everything, which makes it feel like they are scamming you. With a subscription, I CHOOSE to pay the fee, and can even feel good about supporting a project I believe in and get a lot of use out of, much like my monthly subscription to Evernote, for example, not to mention Patreon.
I think option 1 is best as that is inline with the increased costs to Monzo for users withdrawing outside of the EU compared to the EU. With this option you pay a fee that is fair, not a flat fee to compensate for other users who may travel outside of Europe more often.
I don’t think option 3 in its current form is really that useful. When going on holiday, if I am withdrawing cash, it will almost always be more than 200 pound. Therefore I think option 3 could work, but with a higher allowance.
I also feel some kind of loyalty scheme would be great.
Amsterdam isn’t great but a lot of restaurants and bars now accept MasterCard and visa. I’ve been there for two long weekends in the past year and perhaps had to withdraw £60 each time just for drinks in a few bars?
If you listen to Tom in the various presentations he has done you’ll see that Monzo actively want to discourage this kind of loss-leading tactic where you end up getting fees through the backdoor. They are all about being up-front. I think that’s fantastic.
While it looks like i am supporting Option 3 i actually voted for option 1 as this is the most transparent. if different atm companies charge significantly different fees it may be worth directly transferring that cost and providing that info too so we can vote with our feet so to speak
Great thanks for the heads up. Are the options the vote the only options that will be considered or will you take into account some of the other suggestions given here on the board?
I go on touring holidays to Austria, Switzerland and Germany a couple of times a year, staying in smaller guesthouses and B&Bs where they rarely accept cards. £200 withdrawal a month would only last a few days. The ONLY reason i got a Monzo card was because they were pushing the ‘no fees’ thing. Poor show.
Personally, I think the best idea would be to reward people who use Monzo in the UK by giving them the interest free withdrawals abroad, and charging the people who just use it abroad 2%. Not only would that be a fairer use of the system, it would also encourage more people to use their card in the UK. I would definitely use my card more at home if I had an incentive to do it!
Apologies if this has already been covered. I read the topic but don’t have time to read all the comments I’m afraid.
Our of the 3 options I’d choose option 2 because I travel outside Europe more than in so the 2% charge for that is more important that a 1% Euro charge.
However, I don’t have sight of your full financial model so I’m not sure how your margins are made but obviously customer loyalty and service are important to you (which is nice from a bank for a change). It seems that one issue you have is customers ‘using’ you for cheap rates and that only, reverting to their traditional cards on return from their travel and whilst I keep the Monzo card, I am guilt of using it only whilst abroad (although you do get the benefit of any balance left on the card between trips). This being the case, why not offer special rates for customers who commit to using their Monzo card all the time? In other words, if Joe only uses his card when he’s abroad and that averages out at £150 per month but Jim uses it abroad and in the UK and spends £500 per month on average, charge Jim less than Joe - or even give it to Jim for free!
As stated, I don’t know what your business model looks like but if you want to encourage use to make money AND reward loyalty I’l happily ditch my credit cards which I pay off monthly and use my debit card less in favour of Monzo to carry on as you were with no fees.
Just my suggestion.
Option 3 is my preferable choice, but £200 is too low, in my case £400 would be more useful, then 3% charge after that.
I think in the future trying to keep free withdrawals abroad is a great feature. Perhaps offsetting the cost by offering credit at a % rate. Not sure how far away Monzo is with offering credit? I personally use Monzo as a backup card on holiday, that i know i can use without incurring costly charges, so Option 3 is more appealing.
Option 3 is absolutely no use for people who move about and live abroad for short periods. I withdraw money every month to pay for my rent and 3% is too high. This is however one of the only times I use my card to withdraw money! So I’m not taking out the money through multiple transactions but in one amount plus more! So there’s only one ATM fee.
This is why I think charging per withdrawal is better. Because then it does not penalize people who withdraw large amounts but only once a month.
This is my worry with option 3 - one of the reasons I love Monzo because I don’t have to carry tons of cash on me at all times. I just travelled with someone who did and he had £400 stolen from his suitcase on the plane. It’s such a shame because I love knowing what the exchange rate is, and where my money is going on holiday - but if Option 3 becomes the rule then I probably won’t use Monzo overseas any more. Which I suppose is the end goal for Monzo - but it becomes less useful for me in terms of it being a bank that helps me keep track of my money as a whole.
It seems like the goal for start-ups/etc. is to make life easier to live ‘in flow’ - having to worry about calculating exchange rates/keeping an eye on cash withdrawals is what I have now with my bank. I’d rather a flat fee up-front (opt-in for holidays etc.) or a flat 1.5% personally - because then it’s done and you don’t have to think about it any more. Or even a travel card for users, or the more you use in the UK, the more you get, or the annual fee… the £200/3% limit is something personally that would make me be worried when using my card abroad in terms of calculating costs.
Use the card, don’t abuse the business.
I’ve voted for option 1, purely for selfish reasons. I don’t travel nearly as much as I’d like, but when I do, I rarely carry cash. If I do, it’s closer to £100 as a backup and I try to do everything with card. My most recent trips, to Paris and Budapest, have all been entirely card based - I was amazed at how many places in Budapest took contactless, even little corner shops. I know there are some places where Visa & Mastercard aren’t well supported (a lot of replies have mentioned Germany) but for the majority of places, they are, and they’re only going to get wider support as time goes on.
I feel like all users who cost Monzo a fee should pay in to cover it.
Indeed. Maybe Monzo need to set some terms and conditions and just black list the worst offenders cards?
How about some kind of spend threshold for active users (people who actually spend on their Monzo card frequently)? So once you have spent a certain amount each month, your fees are reduced to zero for the following month. Those who only use it to travel would therefore not benefit from no fees and could be passed on the 2% in Europe and 4% elsewhere.
Anyone on National Minimum Wage will earn £1,000 a month otherwise the cost of living is just impossible. Nor would I expect people on less than that to have multiple holidays aboard and need a lot of ATM Usage aboard…
Tough call, this. Free foreign ATM withdrawals was clearly a successful differentiator and has helped enable testing at scale. But being a real bank means real calls about margins, so here we are (understandably).
From my perspective, I’ve always though of Monzo as a potential ‘borderless single account’ as it matures. I haven’t used the prepaid card as much lately, but am just joining the current account preview (hooray!) and intend to use it as my primary account now, with a Halifax Clarity as backup. I spend half my time in the UK, half in Germany (a VERY cash-dominated culture) and occasionally backpack (often to cash-dominated countries too)
Simplest and most transparent option for me is 1% in Europe, 2% rest of the world. The £200 free is complicated - how do I know what £200 in the local currency will be when its presented in a few days’ time? Just tell me on the push notification when I arrive in a country that ‘purchases are fee-free, cash withdrawals have an x% fee’.
So I get a single borderless account, day-to-day spending wherever I am for a banking cost of 1% of my cash spend in the common case. I’ll pay that for the value I get from the simplicity of holding one primary account.
Couple of final points: the ‘overseas withdrawer’ bashing by some here is a bit unnecessary, I feel. They’ve taken advantage of what was offered, and Monzo has benefitted. Any business has a degree of cross-subsidy. It’s about balancing it fairly in my opinion. And, if my understanding is correct, one cash withdrawal each week in the UK would also cost Monzo around £16 per user per year. The UK’s cost free approach to banking is rare (in Germany, you can be charged 8 euro for a single withdrawal from an ATM not owned by your bank if you’re not careful!)
Don’t think I could have put it better myself @simonb 
