Revolut charges only 2% on top of the first £200 as far as I know.
I think we can safely assume this is what Monzo will go with (option 3)… as its the most beneficial to them.
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This feels like Brexit all over again. Especially with people voting for the most expensive option without actually bothering to do the maths. And the ad campaign just says “£200 free allowance for everyone every month” without people actually realising that they’ll be paying 3% (that’s double than most Visas from regular banks) and they’ll almost always go over the threshold when they go abroad. Especially since most POS terminals abroad don’t work with Monzo cards.
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Then Revolut shouldn’t have been suggested if it doesn’t have free withdrawals. It looks like that’s similar to suggestions Monzo is considering. Starling still has free withdrawals, might be worth looking into if people insist on it being free. At this point they don’t have a lot of users and it isn’t entirely unsustainable- but they will definitely start charging afterwards. If people want to take advantage of that while it is still free (you don’t get proper targets feedback from cash withdrawal anyway) then why not?
If Monzo introduces option 3 I’m sure some people will get their family members/ friends to get Monzo cards too to try and stay under the £200 budget. There are a ton of options out there for travel like others have suggested, and I’m not using Monzo because it’s the cheapest option. I love the design, convenience of it, A+ service and transparency. If people would like to save money while travelling and use a bunch of different options as backup we can hardly begrudge them that.
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Crazy idea: How about I’m offered to withdraw equal to the value of my usage data sold to third parties? The more I use the card the more ‘data’ is generated on me which has value. Then I can get this value back through free withdrawals up to that limit, after which, hit me with that %.
I agree that a monthly allowance doesn’t cut the mustard. If I go on holiday with the family for (say) one or two weeks, I am going to need more than £200 cash. An annual allowance makes more sense - say £2500.
The fairest thing to me would be to charge what the costs are so if it’s 1% in Europe and 2% in US then charge based on that. Keep it simple. Ideally I’d love to see you also fighting with the ATM’s over the extortionate fees in the first place. While also keeping an eye on ways that your business model can allow you to only pass on a percentage of the costs 
Only starting using Monzo recently and not that fussed about the news (my Halifax Clarity credit card offers free ATM withdrawals/ free foreign transactions at Mastercard rates) however, figure I would add my option 4.
I have read somewhere in the thread that offering a £1,500 yearly allowance costs Monzo in the region of £30. The £200/month option is great for users like me (have an alternative I can withdraw cash on and try to pay at POS in general) but there is also the potential for abuse. Option 3 in it’s current form, someone could withdraw £200 a month, totalling £2,400 at the end of the year which would then cost Monzo £48 (based on the £30 for £1500). And ultimately, I would like to see Monzo succeed. Therefore, I would suggest £200 a month for 3 months a year. And then if people want to withdraw more, charge them the figure you mentioned. Alternatively, like Revolut do, start charging a monthly fee. Monzo is a great service and ultimately, all great services need revenue.
What about the option of a Non UK fee - i.e. if you use your card in UK, then T&C’s stay as they are, BUT all customers have the option to pay a - £16 per year fee (estimated form analysis you have provided) for free ATM use abroad? Most people will only use ATM abroad, say over a 3 week period each year, so should be happy with a say 1.5% charge (key criteria is its competitive). Your analysis explains that 13% of customers account for 85% of your ATM costs, would they be willing to pay a yearly fee?.
Hi. I feel that maybe offering a one of payment per year/month…then having an unlimited use over the month could be an option. Bit like how banks now have the current extra accounts and they charge you montly but you get extra benefits such as phone insurance…breakdown cover etc. I only use my card 2-3 times a year abroad anyway. Most of the time i use it in the uk.
Other idea to one above could be maybe a one off fee the month you will need it abroad abit like a phone data roaming add-on could be an option. Pay a set fee that month and get to use it for that whole trip unlimited.
Keep up up the good work…loving Monzo.
I guess what I’m trying to aim at is that simplicity is king here: Make it easy for me to understand why I should use Monzo, and I will. And if the pitch is “they’re slightly cheaper, maybe, probably, than most of the regular banks, which do, however, give you things such as cinema vouchers that may or may not make up for their fees, who really knows, especially since you can’t use them for 3D screenings”, then I’m less interested than if it’s “for a very low monthly fee it’s free to do all these things that the normal banks charge you random and impenetrable fees for”. But perhaps that’s just me.
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My option 4: Monzo could easily figure out who the loyal long term customers and biggest supporters are (I still have and use my Mondo card). I’d say temporarily put a markup on for these small proportion of users who are short term users or signed up recently and are withdrawing money from ATM machines abroad.
Hi Tristan,
I was wondering whether you guys would be able to offer zero fees overseas for anyone holding a current account with you (when current accounts become available, in due course).
So, anyone that holds a Monzo current account, on the proviso they pay in a minimum per month (i.e. their salary), would be granted the privilege of not having to pay ATM fees abroad.
Is this something you could consider?
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A version of 3.
How about £2400 a year - then 3% - I think anyone travelling a lot will soon make up the difference. As you mention, it’s still cheaper than most ATM cards.
The £16 is if everyone pays, not optionally, and might rise or fall.
They took the total fee / active users. 85% of the total is from 13% users.
So can you try the maths again, 13% of 401661 users costs £5.4 million a year (401k * £16 * 85%).
Wait, so Monzo offered me a fancy prepaid Mastercard with no fees but never designed it to be used like that? Can you blame a guy for thinking this was a great feature, even if it was accidental and unintended?
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May be already put forward but why not allow a percentage of your last 12 months spend in the UK. This encourages the use of your Monzo card in the UK. So say it was 10% of UK was free abroad on £1000 UK spend you had £100 free abroad then the % fee kicks in.
This is such a valid point!!!
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I signed up for the original card to use it abroad in place of my 2 FairFX cards (one EUR one USD), since this card could be used anywhere and I used it in a lot of places but only for a month or so. I really liked it but didn’t even think to use it when I came home, as I was thinking about it as my card for elsewhere.
Now the current account is on its way, this may change, though my current current account (santander 123) does pay some interest and if I use their card (I pay it off each month) then the money is in my current account earning interest.
With Monzo, I have to transfer in advance as it’s not an actual credit card so I would lose out there, I had assumed Monzo make the money on the basis they are holding customer’s cash (and doing something with it).
I do love the app though.
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