Option 4: every new account gets a £200 foreign ATM allowance. This is reduced when foreign ATMs are used, and increased by £50 every month that a transaction has been performed in the UK (physically - not just online). The allowance is capped at £600 (i.e. 1 year of monthly increases). This seems easy to understand and fair, while preventing Monzo from just being a travel card.
In relation to the cash point fees when abroad.
I thing that the fee that Monzo should charge it’s customers should be the actual fee that Monzo itself is charged. Wherever the card is used to obtain cash.
That way it is always transparent and fair to all.
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I go abroad all of once every few years but I’d rather pay an easy to calculate 1 or 2% on the rare occasions I needed physical cash than have to faff about with working out allowances and deciding whether it’s worth it to pay a 3 or 4% rate above that allowance if and when it’s needed.
A flat fee achieves three things: 1) It keeps the maths simple enough to work out in your head. 2) It encourages people to only withdraw cash when it’s absolutely necessary, and 3) It stops the rich/poor divide where those who can’t afford to travel often but frequently use their Monzo account in the UK are subsidizing free withdrawals for those who have the luxury of being able to travel regularly.
Oh, and as a side effect it would stop couples or families having multiple accounts and gaming the free allowance system to the detriment of others. A low fee makes it fair and equal across the board. Don’t like it? There are plenty of alternatives specifically designed for foreign use.
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I agree. And I would not separate UK from Europe (despite Brexit …). Many Monzo users are frequent travellers in the EU and will remain after Brexit.
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But it’s not, really. As a customer, you would have no way of knowing how much you’d get charged as a fee. That sucks, doesn’t it?
I’d rather see the exact fee as a separate transaction item, rather than any %ages.
If you take out $100 and get charged $3, this could show up as two items:
-
£75Withdrawal ($100) -
£2.26foreign ATM fee ($3)
That way, I could then decide whether to keep doing that or maybe even find a different ATM with a better rate. Or maybe I don’t care, I can just ignore it.
There are other benefits to it being its own transaction.
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Working for a mobile network that is also an ISP, i am fully aware that a very small number of users account for the vast majority of the traffic. Therefore i would suggest a model where there is an element of free use for the casual user but the more frequent user bears the whole cost and is not subsidised by everyone else. Granted you may lose them as a customer but in the long run you are probably better off without them.
I feel like ive been spending all wrong, ive never spent on a card POS abroad because i cant see the exchange rate and always felt it would be a worse rate, then cards get blocked etc, in which case i dont think £200 is very much at all. Maybe if you just have your own money its ok, but if you have a family then it wont go very far.
Option 3 seems fair to have an allowance and then to be charged when u go out side it.
What about a flat fee per transaction or per month, say £1? I use my card a fair bit abroad though I’m unsure if I am in the 13%.
What I want is certainty over costs - that’s the problem with other banks - the cost is a mixture of percentages and fees.
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But haven’t Monzo been operating exactly in this way for the entirety of its existence, then, getting a lot of customers excited through a loss-leading strategy? And all businesses operate in this way, don’t they? When you buy a banana at Tesco, are you paying the true value of that banana, with all costs passed on to the customer directly, or are you paying whatever Tesco calculated would make you want to buy it, keeping in mind that they have a complex business with many different revenue streams? Is the next step for Monzo to make each customer pay an appropriate share of their office rental expenses? Do we get to vote on that too? There are a lot of expenses associated with running a business, and passing those off to customers directly is not as much transparent as it’s confusing. Free withdrawals is easy to understand, even if it costs me money on for example a monthly plan.
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No. Certain media organisations have portrayed Monzo in a way that isn’t consistent with it’s goals or how it is designed to be used.
Barclays offer a better rate at certain ATMs, I’m not sure if @tristan and co. applied this. I assume it was ignored, because the average user will not or can not hunt a particular ATM, so should they be penalised?
I voted option 3 but wondered what the modelling is around that being sustainable?
Presumably with shifting to option 3, all (or the majority anyway) of the ‘high use’ withdrawers will switch to another solution (e.g. Revolut). I’m not a high use user but I would naturally do that (withdraw the first 200 with monzo then switch to another free platform for the rest if i needed or withdraw another 200 on my wife’s card)
If the majority of the users did that then there would hardly be any people having the 3% charge in order to cover the people getting £200 free.
Is Monzo’s model willing to be loss making on the ATM withdrawal? If not then option 3 might not be sustainable long term.
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The model is to be loss making to an extent, so to offer a good customer experience to the majority of users but for those that are rinsing the card for cash withdrawals, make them pay for that instead of the majority of users subsidising them.
My point is that the ones who are rinsing will divert off the platform (so no longer costing Monzo money but also wont be bringing any money in with the 3% fee)
My concern is that under model 3 hardly anyone will be paying so is the £200 free really sustainable?
Some napkin maths:
Lets say an ‘average’ traveller goes on 2-3 trips a year using that limit
Limit * number of trips * monzo’s fee that they pay
£200 * 2.5 * 0.015 = £7.5 loss
I’m guessing once you actually average across the monzo community there would be less users and also they wouldnt be going up to the limit but thats still a fairly hefty loss per customer
Option 3 would be good as it allows you to withdraw without any fees, something that might be useful would be a system to remind you to get the correct currency out before you leave the U.K. Or information on stores which allow free cash back in different countries.
Likewise I can’t find any way to vote. I would say option 1 though as it is purest simplest and fairest.
Option 3 favours those withdrawing £200 or less on a trip and will be paid for at a premium by those withdrawing more.
As one of the major benefits to many people is fair and low charges abroad Monzo could maintain this for all by using option 1 and also manage non profitability. This cannot be managed by option 3.
I think Monzo would be able to subsidise to an extent - they’ve obviously done the math and feel that they can offer that to the user base.
As has been highlighted before, it really is a very small majority racking up hundreds of £ in fees that at the moment Monzo is just absorbing.