I think I would go for option three 
Not sure £2 would cover the costs. Unless it was being charged to everyone every month (going against the “free” aspect of Monzo) This would also impact the people that don’t use it for traveling and in fact use it for what it was build to be a user friendly finance tracking platform.
There’s one thing I don’t quite understand about this topic. I was in Spain until a couple of days ago. I took cash out of an ATM once during my visit, and the ATM charged me EUR 1.80 on top of the amount that I withdrew (with my Monzo card). Is it the case that some banks have the effrontery to charge me for taking money out of their machine, and also to charge my bank / card provider for the privilege of letting my use their machine?
See my post here explaining the flaw in the maths. For that small monthly fee, you need most people jumping to premium; even though only 13% are generating the costs.
Monzo’s benefits are also meant to be the future marketplace, better spend tracking/budgeting tools, API access, fair costs etc.
The cost can be debated. Principle is a premium fee for those for whom the primary standout monzo feature is free withdrawals abroad.
See my previous reply. I’m debating principle not detail 
And I’m debating that 87% won’t pay so 13% get something cheaper
It’s £8.63 per month for the 13% to pay their share, if you want a figure.
Option 4: free withdrawals if you keep a minimum amount of money on your Monzo card per month or if you use Monzo on a minimum number of transactions per month.
I assume ATM charges have some sort of fixed rate part - so per pound withdrawing say GBP 10 of currency is more costly that GBP 100 - so perhaps option 3 could be made more attractive by applying a rate to low value withdrawals too which could allow the normal percentage rate to be lower
Another question though - is the “dirty 13%” actually the same people - or are you saying statistically over all transactions cost is from 13% - so it could be different people - because obviously we are not all abroad all the time so if the later then it doesn’t really identify “overuse”.
When I first read the blog post and looked at the options I was drawn to option 3 as this would be fairer to the customers who would genuinely benefit from an allowance to use on holiday. However, I’ve been thinking about this some more. Monzo don’t set the charge - it is applied by the local provider. If you don’t like the idea of foreign cash withdrawal charges there’s no point in having a go at Monzo (as some have done already in this blog), write to your MEP and actively campaign for zero charges for cash transactions across Europe - just in the same way that mobile phone operators have been forced to remove roaming charges in Europe, we could campaign to have banks remove the ATM charges [seen as we are all part of Europe. Oh. We got voted out].
I think there should be a standard rate applied (Option 1). It has been great being able to withdraw cash from the ATM without charges - thanks Monzo - but I agree this is not a sustainable business model going forward. Don’t blend the rate as in option 2 as this isn’t fair to customers using their card in Europe.
This to me sounds like a fair use of the card and should drive up the use of card payments rather than cash.
But I do like the idea of a reward system whereby loyalty - using your Monzo card for card payments in the UK, and in fact anywhere in the world - is rewarded with zero ATM charges for a percentage of cash versus card payment. Do Monzo make money from each card payment? I’m aware that retailers get charged a fee, something like 1.5%, by the merchant for each card payment (we all know this from trying to book an EasyJet or a Ryanair flight).
So, my option 4 would be… and this is where the number crunchers at Monzo could advise better, but say for every £10 you spend on the card entitles you to £2 of charge-free ATM withdrawals in Europe and £1 in the rest of the world. The more you use your Monzo card the more you can benefit from zero ATM charges. If you’re only using Monzo for ATM withdrawals then you pay the fee.
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Give customers the option to choose between plans. Obviously you’ve vetted out each option to cover your costs… some ways may work better for some than others… it may cost you more to implement this, but it will appeal to the greater audience and will result in more growth. Thanks for considering my suggestion.
Oh blimey - you miss the point !!!
Good post. I agree with all of this.
It is a competitive market out there and, while I realise that Monzo needs to ensure the business is sustainable, I for one am part of a fickle bunch who will happily switch services if there is a cheaper alternative. At the least, Monzo needs to match it’s closest established rivals like Revolut.
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If you want to make things overly complicated for users and punish people who only use the card sporadically… Lets keep it simple
I am one of those who signed up on the basis of free overseas cash withdrawals and my first trip to Greece was a revelation; I ended up needing more cash than expected as so few establishments took cards. The decision to use Monzo for this purpose was based on Martin Lewis’s recommendation (moneysavingexpert.com). At the time I didn’t think about (more accurately did not KNOW about) the costs to the card issuer for these transactions, just that the cost to me was less than my bank’s debit card (2% + £1 for cash in Europe).
However I fully subscribe to the notion that a business should, as a minimum, cover all it’s costs an am not averse to any system which restores that balance. Simply put I will continue to use whatever system costs me least.
So either a one off charge or a 1% or £1 charge-per-use would not deter me.
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Would it be possible to look at a rewards based system to penalize that top 13% who are potentially using Monzo just as a travel card? Perhaps you need to make a certain number of ‘day-to-day’ transactions, i.e. at supermarkets, convenience stores, mobile phone top-ups etc, in order to ‘redeem’ overseas travel perks, or, something along the lines of your Monzo card has to be used 21 of the previous 30 days before the overseas transaction was made, in order to promote daily/cult-like monzo use and remove those who perhaps leave it in a drawer collecting dust until their next overseas voyage?
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Option 1, most of the posts here are along the lines of, brilliant option 3, £200 is enough for me so I continue to get it free, the problem with this is the income stream may well be small if you take that option because people will swap to other cards when they hit the £200 limit within the month and judging by the posts the majority of people here will continue to pay nothing, 3% moves you below the HSBC offering and within pence of Nationwide. The point is to have sustainability and remain competitive within the marketplace, which from your analysis of the big 6 you achieve by quite a margin undercut with the 1% / 2% model.
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I selected option 2 for the following reasons -
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A simple solution for a simple problem.
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Future proofing that will be required for navigating the uncertainty that is the UK leaving the EU.
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A flat rate is fair across the board for all users.
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A lot of European countries allow card usage for everything now. However the rest of the world still has a majoritavely cash based economy, higher fees for ATM withdrawals in these cash based economies is a large negative.
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Option 3 is not viable as any sensible customer who has done research will choose Revolut since it provides the exact same policy but with a 2% charge once you’re over the limit.
Generally I think this has been handled terribly. I respect the honest approach with coming forward to explain the decision you are trying to make. That respect does not extend to the fact that you’re letting a community of individuals with varying degrees of knowledge on the subject make a decision. I’m getting a bad case of Brexit déjà vu despite this being much smaller stakes.
You are the company trying to build a bank you’d be proud to call your own yet you aren’t able to make a decision that stays true to your values without putting it to a public forum. I have lost faith with this company and suspect I’ll be opting to use a different but similar provider shortly if the poll remains the same.
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Like a lot of others I am amoung the % who signed up from the recommendation of Money Saving Supermarket regarding how cost effective it is to use abroad. Throughout the times I have used Monzo it has been great. I truly believe that this is a really good business model.
Whilst I have used my card within the UK I don’t very often and admittedly did not consider (or was aware) of rising costs to the company which until now has been absorbed solely by Monzo.
Like most people I will continue to look for the most cost effective way of accessing my funds abroad and do hope that this will continue to be with Monzo.
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