ATM Fees Abroad: Asking the Monzo Community to decide pricing

Monzo Chat
1020

I joined Monzo a couple months ago, and I really love all the features, and I cannot wait to get a current account once it is open to everyone, and also invest if there is another crowd funding :-).

I recently went to Japan, with some stop overs, and whilst I tried to pay by card at most places, unfortunately, some countries are still a mostly cash based society, where you cannot avoid having to use the ATM for the majority of your transactions.

I think a good way to go about the change will to have an individual ATM withdrawal fee (%) for each country, for which better terms can be negotiated with time, and will avoid having to make another change to your policy and be sustainable.

At the moment when you visit a foreign country, you receive a notification of the current exchange rate, so at the same, you can receive something like, in “Germany” you will be charged 0.5% for making ATM withdrawals.

Then when you make the withdrawal it will tell you how much you were charged for withdrawing the money including the ATM fee.

You can then try to negotiate with ATM providers in specific countries where you see high volume of withdrawals, to get a lower fee, or by paying a fixed fee to get free withdrawals for all your customers, which can be paid for by either an in app purchase (i.e pay £5 to unlock unlimited ATM withdrawals for a month) or be subsidized by Monzo.

For example, in Japan, you could make a deal with 7-eleven bank, which operates ATM’s in all their stores, and I am sure they will be happy to increase their footfall to the shop because people withdrawing money will probably buy something too, and tourist tend to spend a lot more.

Once you have got a better deal from a specific / all ATM providers in the country you can simply update the app with the better rate, and say withdrawing from ‘XYZ’ bank is free / 0.5% whilst other ATM’s in the country will be 2% (most expensive ATM withdrawal rate, so the customer doesn’t get bombarded with a lot of different rates).

Also if you then add a page on your website/app, which lists all the ATM withdrawal fee’s for each country, people can check in advance the rates when planning their holidays.

One of my main reasons for joining Monzo was indeed the 0% foreign transaction fees and free ATM withdrawals worldwide. However, I think if the fee’s you charge is actual cost, and customers are not being subsidized by other customers everyone will be happy. I hope Monzo will be making money from other channels, i.e once the current accounts are out of beta by lending etc.

This solution will allow a possibility for reduced / free foreign ATM withdrawals in the future, whilst still remaining sustainable in the present time whilst you grow. Though, I do hope by that time most of the cash based societies have moved towards mostly cashless.

Sorry for the long post, I am hoping that we can still have low ATM withdrawal fee’s worldwide because it is much nicer to carry a card, then have to carry a lot of cash and worry about keeping it safe.

3 Likes
1021

Here’s the thing: I get the impression that Monzo’s killer feature, in most people’s eyes, is the lack of fees. Never seeing that word in my account feed has been a freeing feeling that has made me love Monzo a lot. For the first time ever, I don’t feel like rich bankers are getting richer whenever I spend my own money. Even if Monzo simply passes the actual cost onto its customers, that feeling will still pop up every time I see the word “fee” in my account. Introducing fees will just take Monzo one step closer to being just another normal bank. A nicer, and maybe a bit cheaper, bank, but still a pretty normal old bank doing business the old-fashioned way that people have had enough of. The opportunity here is to rethink Monzo as a subscription-based bank, where I have different options for a monthly subscription, depending on what I use Monzo for and want out of it. I care as much about Monzo’s sustainability as anybody here, I think, but fear that removing such a central reason why people like it will significantly impact its growth.

5 Likes
1022

Option 4

Is it an option to remove the ‘gamification’ of this feature entirely? Every user just absorbs the ATM charge fee that they use. That way no one (not even Monzo) is at an advantage or disadvantage? The only people who lose out are other banks that charge an excess for ATM charges abroad.

1023

What a ridiculous argument. How many out of the user base are going on Holiday 12 times a year.

In real use cases a £2400 per year allowance is not the same as £200 a month

1 Like
1025

Ok, so I have tried to read as much of this thread as I can but I’ll admit I did have to skip some of it so apologies if I am parroting anyone else’s posts.

My biggest issue with Option 3 is the flat 3% fee above the threshold - this seems pretty steep to me. There is no option in the poll to vote for an option 4, and it looks to me like this is boosting the option 3 votes from people who are actually after a different solution…

One of the really easy to sell features of Monzo is the lack of fees. I think that it makes Monzo a much less attractive proposition once little fees start creeping in here and there.

Yet I fully understand how these ATM fees can be crippling. But I think that the figures could well be misleading since the number of Monzo users has more than likely jumped up massively over the summer months with people looking for the best solution to save them some money on their holidays abroad. Who can blame them?

In the longer term I am sure that this usage will actually even out and prove to be less of an issue that it is currently seen as being.

My Option 4 would be the following:

£500 free annual allowance, then charge of 1% in Europe and 2% ROW thereafter

Yes Monzo would still be covering some of the costs, but far less than it is currently and I think that this would still allow Monzo to keep its ‘edge’ when compared to others.

Interested to know what people think!

Cheers,

Charlie

1026

I think I speak for most people when I say that I really want Monzo to be the best service there is.

So Monzo I say this… it seems as if option 3 will win (I think in part because option 1 and 2 will take votes from each other) , if this does happen, PLEASE at least be as good as competitors like Revolut who offer 2% charges after their £200 buffer. If not matching this, at least find a way of making it a more competitive option like having a yearly buffer (which it seems nearly everyone would prefer, even if it’s less than £2400)

I really love using Monzo, and I really don’t want to have to use competitors as well, so please come back with a better option!

2 Likes
1027

The issue is that its not that simple ATM charges will vary from country to country operator to operator. Users will likely get annoyed it they withdraw £110 from on machine and get charged say £1.50, then go to another and get £3.45

It much better to have a clear upfront systems where the users know exactly what they are going to pay

1028

Realistically, the % won’t be 3% of what people withdraw in one go.

If you withdraw £300, you’d pay £3 in cost ([300-200] * 0.03), but that is actually a charge of 1% (£3 in £300). You only really hit 2% charge if you withdraw £600.

So option 3 is definitely the most sensible here, as it also builds in extra buffer to cover the cost that Monzo have to absorb to allow the £200 threshold.

1029

i have voted option 1 as well as other wise i would use to withdraw my Halifax card when in Portugal. They charge me £1.50 per every withdraw, it doesn’t matter if i withdraw €10 or €200, off couse i always opted for the max withdraw amount possivel.
£/€200 per month withdraw it’s not enough for me when i am there as many places don’t take cards for payments.

1030

I use Mozo because it does not seem to conflate class, cash and privilege with banking. I am a working class girl I work hard and earn modestly. I do not think this should preclude me from banking. The thing about being poor is that it is expensive. I like Monzo because it allows me as a working class person to access the SAME things as the upper parts of society. It is actually quite a radical proposal that you cannot buy yourself out of a sticky situation, in this case fees and that the poorer of us just have to suck it up. Nope no more banking hierarchy. No platinum banking. It is not fair. and It would make me leave.

1031

So why did Monzo not introduce charges when they asked people to sign up ??? The point is its a false promise My disappointment is that I fell for the false promise and how do you know all they want to do is break even ?

2 Likes
1032

I went for option 1

Weighing up the options I think it’s the fairest of them all. I personally think many people will look at the £200 free and as unlikely to hit will choose.

I see no issue with the 1%/2% charge for cash withdrawals.

1033

Trust them; or don’t.
Use their card; or don’t.

1034

A summary so far of some suggested Option 4s (to save you reading 1000 posts)

Alternative rates

  • Free up to £x, then 2% in Europe and 4% in RotW
  • 0% in Europe and 2% in RotW
  • Free allowance in Europe only
  • Totally free
    – Paid by Advertising
    – Offset against lending revenue streams
  • Pass on the exact ATM charge(s)
    – Tom: Yes, we could. It would be about 1% in Europe, 2% outside Europe.
    – Optional: Have a map in the app that shows you fees charged
  • Tiered fees (£1 for £100, £2 for £200 etc) or per withdrawals a year
    – Tom: The problem is helping them figure out what [the £ tier] is in the local currency
  • A flat rate at the end of each month if you make withdrawals abroad (tiered)
  • A (small) monthly fee / premium account
  • Active User / For every £x spent/saved in the UK = £y free withdrawals / Tiered rate
  • Benefits from using a partnership/marketplace link (e.g. Switch Electricity)

Tweaks

  • Increased allowance (and/or possibly annual/daily) +/ rollover for Option 3
    – Tom: withdrawing £1500 costs £30 in fees
  • No Fees if you are using going abroad twice a year / for x days a year
  • Applying restrictions to heaviest users
  • Cancel the cards of those who solely use the card for the free international withdrawals
  • Reward for not withdrawing cash abroad
  • Tariffs (chose Option 1/2/3)

Other

  • We lobby for some form of regulation around the fees in general
  • Raise money from the company behind the main ATM network you currently see usage from
  • Gamification / Points system / Loyalty scheme
  • Leave Monzo / Use competitor

edits for clarity

9 Likes
1035

Would any of those option 4s work for Monzo? I doubt it, if they aim to keep things simple, transparent, inclusive, level playing field… as well as covering their costs.

1036

I think option 3 is the best solution, I joined Monzo because of the modern idea of free withdrawals. over £200 is not necessary when the majority of places take card or contactless.

Thanks for keeping us in the loop Monzo :)!

Tacza

1037

I know that this is a problem for Monzo as at today, but I strongly suspect that the answer will have to be revisited in the near future, once we know what Brexit looks like. It could well be that Monzo has to treat ALL ATM withdrawals outside the UK as being in “exotic” high-cost locations. In the meantime I voted for Option 2 (the shared pain option) so that at least you don’t have to think too much about it when making a cash withdrawal.

1038

Some would (pass on the charge), some might (tiered costs), some probably not (lobbying the world for lower fees).
I have deliberately not excluded ideas just because I don’t think they will work, any I’ve missed are just because of the 1k posts to skim.

1039

My suggestion to monzo was that there should be a premium account option which gets benefits such as free cash withdrawal abroad. The £1.50 would cover the £16/person that monzo claim it costs them. Fee could be £2 if for premium account holders only. Sadly it’s the only benefit no other banks offer so monzo need to find a better way to keep ahead of the game.

1040

I like the idea of a £200 free allowance, but an addition would be that if you don’t use your allowance in a month, it rolls over to the next month.