ATM Fees Abroad: Asking the Monzo Community to decide pricing

Monzo Chat
1106

TL;DR: Option 4: No free withdrawal for leechers - charge them 5% for cash withdrawal abroad. A monthly free withdrawal allowance of £500 per month, £2,000 per year is unlocked for those who spent at least £300 per month at home. For every £200 extra spent per month at home, increase the limit proportionately up to a maximum of £1,000 per month, £3,000 per year. Then, charge 5% for withdrawals outside of limit.

Long version:
Considering free cash withdrawals was one of the selling point of Monzo, I can see naturally that Option 3 would be the popular option.

Since this thread has already grown so much, I’m sure what I’m about to write will be similar to things being mentioned already, so hopefully by writing it again, I will just add support to what’s been mentioned already.

Since the issue of ATM fees seems to be racked up by a minority of Monzo users as per the blog, my suggestion for an Option 4 would be that for a start, if a user is not using the card at home at all, then IMO they shouldn’t get a free cash withdrawal allowance at all full stop. To determine who is an active user, impose a minimum monthly spending limit of say around £300. Those who have spent at least the minimum then gets a monthly allowance of £500 (£200 seems quite limiting for countries where cash is king), with an annual allowance restriction of say £2,000. Then, for every say £200 extra they spent per month, that monthly allowance increases proportionately up to some maximum free allowance of say £1,000 per month or £3,000 per year. Once the user has hit the maximum limit, charge them a flat 5% for withdrawal thereafter.

The numbers are illustrative with the maximum being the current limit after verification. I’m proposing 5% since the current limits are fairly generous IMO and so for extreme users who are taking out lots of cash, it seems only right to charge a bit more then for Monzo to recoup the cost.

For active users, surely the minimum amount I suggested is fairly reasonable… although I understand people have different budgets. Amount spent is just a simple way for working out who’s active, but I feel it’s quite an effective one as opposed to the number of transactions, since people could be buying a packet of chewing gum at Tesco in every transaction and that way they can rack up lots of transactions without spending much to get the perk of free withdrawal.

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1107

At least it’s provoked an absolutely massive thread!

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1108

I like the free monthly limit option, it would be good if this could be rolled over if unused (subject to a maximum).
Also what about an option to earn credits that could be used as free withdrawals abroad e.g. For introducing new members, holding a credit balance / generally using Monzo in a mutually beneficial way.

1109

Also forgot to mention… numbers subject to change depending on how much money Monzo actually makes from us spending on our card at home. Based on all of the user data they have, perhaps they can work out a way to balance the profit make from card spending vs cost generated from withdrawal…

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1110

I do, but that’s besides the point. I was responding to a comment :kissing_heart:

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1111

I guess this is what monzo needs to figure out - perhaps not for x amount of money going in and out - I am a student and so I only have £1500 max going in and out each term but I still use my monzo card all the time - perhaps it’s about frequency of using the card in the UK based on your previous months?

If minimum is a modest £200 pm which must all be spent within that month (or on average over previous 3/5 months [£600/£1000]) then that would be eligible for premium user - hence why I suggested “green user” not gold as green applicable for everyone who is using sustainably should be rewarded for that - whether it’s with a little money at a time or a lot

1112

My preference is for a variation of option 3 : higher non charge monthly limit of say £500 after which a 2percent charge is reasonable.

1113

I used my Monzo card in Singapore to buy metro tickets in May/June this year.

1114

The problem with features such as ‘free insurance’ or ‘5 free dog walks’ is that they are ‘design by committee’ products that don’t universally suit the customer base.

For example, If I have to pay £50 a year for the account but get free insurance, I wouldn’t be that interested because if I have a comprehensive vintage porn stash and some 18th Century stamps which wouldn’t be covered by a standard insurance policy I would have to have a separate policy anyway.

For me I feel like bundled accounts sound good on the face of it but generally lack any substance when it comes to the details… most mobile phone insurance bundled with bank accounts stipulates that they can use third party components meaning that I may find my iPhone gets repaired by someone unqualified or has non-apple parts used during repair which then voids my Apple service options down the line. When I worked for Apple I saw no-end of phones that insurance companies had ‘repaired’ which then had major problems afterwards.

1115

So the business model has failed already or has it? Monzo has now signed up hundreds of users to whom they can sell their future current account and no doubt other financial products by previously offering a non sustainable product. The phrase ‘difficult decision’ is an overused phrase really meaning ‘unpopular decison’ . If monzo charge for using ATMs abroad then I’m out, I’ll go back to using my traditional methods abroad.

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1116

yes…that is exactly what happens

1117

Welcome to the grown-up world of real banking. UK banks absorb the ATM charges within the UK. The rest of the world passes those charges on to the customer and their originating bank.

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1118

Well, there’s a big difference. I usually go on holiday the last week of August and the first week of September, for example. If I can make one €200 withdrawal in August and another in September that’s a lot different from not being able to make the second one until a month had elapsed. This would affect how I vote at the top of the thread. Thanks for answering though!

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1119

Option 1. However, I think another option would be link use abroad to U.K. usage so say for example are using monzo as almost default uk bank account then increase free limit from £200 to £500 per month. No UK use in 30 days prior to trip = no foreign use

1120

I love this idea. I already pay a little every month for ‘upgrades’ to my big/old bank account, and would be happy for Monzo to look at doing the same thing. A viable but non-exploitative business model is the goal. In general I’m happy to pay for a product if it’s worth paying for. So far my experience of Monzo is that it absolutely would fit into that bracket.

1121

It currently costs Monzo about 1% in Europe and 2% in rest of the world, however the community seem (according to the poll) to prefer paying 3% :weary::angry:

1122

No. The Monzo prepay has always only been a beta - a trial of what works and what doesn’t, towards being replaced by a current account.

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1123

Thanks for giving us the voice to help you make this decision :monzo:
So far I have only used my card in the UK. Have loved it since I got it, great budgeting tool really helping me to keep track of my finances. Can’t wait for the current account!
So I have gone for option 3 as when I do go abroad I can’t see me needing anymore than £200 a month (and would be happy to pay a fee if I went over). I would aim to use the card as I would in the UK and only use cash when absolutely necessary.
Keep up the good work :relaxed:

1124

That’s exactly correct - I understand it fine.

Yes, you’re right, in my example £1500 would be £30 charges to Monzo.
In their proposal you would be allowed to take out up £2400 if you went away once a month - so would be £50 charges to Monzo.

They are happy to make some losses at it is part of why users are with them and they make money back in other ways. I think you’re misunderstanding.

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1125

I have to admit, I’m one of those people who got the card because of the benefits when using it abroad. I have been a Caxton/FX user for a number of years but was tempted by Monzo’s great rates. Indeed I’m on a family holiday right now and happily using my Monzo card to make payments when I can, but also to draw cash from an ATM when I need it.

Right now I’m running at approx €500 out of the ATM and €650 on the card. If I was only going to use one card then Option 1 would mean that Monzo was still the best deal. Options 2 & 3 would put Caxton/FX ahead.

That’s surely a bit disappointing from a marketing viewpoint for Monzo. You would be better taking the 1/2 % off the MasterCard exchange rate like the rest of the competition. (Option4).

You say that you have a minority of users that are creating the most charges and that this is not sustainable, but that is on your prepaid credit card that you are planning to replace with your debit card. Is now the right time to chase these people away. They could well be the high earners that you want paying there salaries in to your current account every month.

It’s also interesting that you have opened this up to a public vote. I think that’s very brave. You could find that you are taken down a route that serves another minority, but doesn’t help you build a wider customer base.

Best of luck.

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