Firstly I think your openness is great on this topic, and I’ve always seen the free cash withdrawals overseas as a marketing hook whilst you build a brand and user base, so talking about moving beyond this is a grown-up conversation to be having and I applaud you for it.
My vote has gone for option 1 over option 2. Given your costs are so different between withdrawals in Europe and ROW, to me it feels right that in looking to re-coup those costs that you charge your customers in a way which reflects the costs you incur. 1% in Europe, 2% everywhere else seems entirely fair and understandable.
And that feeds into my thoughts on why option 1 is better than option 3. Option 3 is a gimmick and encourages behaviours which don’t look to me to be in Monzo’s best interest. It encourages and subsidises those individuals who have a Monzo card solely for overseas spending and who cap their cash withdrawals at £200. You can’t blame people for doing so, it’s entirely economically rational, but there will be many people who see their Monzo card as nothing more than an overseas spending card with a £200 freebie cash withdrawal limit and you will continue to lose money on these people. In allowing a customer to withdraw £200 a month (and never/rarely more) you are providing a service with a discrete and identifiable incremental cost to yourselves, and seeking to make that money back from those customers who are blind to the £200 a month limit by in effect over-charging (relative to the incremental costs you incur) on their withdrawals over the £200 limit.
Long story short - the fairest way forward is to only charge a given customer for a given withdrawal a fee which is in-line with the cost to you of that withdrawal. Asking a portion of your customer base to cross-subsidise other customers feels to me fundamentally unfair.
Very valid suggestions… in my personal opinion this defends on your customers… will the majority be customers who understand gamification (probably definitely right now but hopefully a good mix in the future)… or are your customers people that was a simple set of rules to understand so they when they travel they don’t have to pull out a calculator every time they want to asses how much their withdrawals/holiday is going to cost
I think as a bank shooting for a huge percentage of the uk banking customers, id think the simpler the ‘rule set’ the less confusion and complaints and therefore the average customer would be happier…
I have been using my card increasingly in the EU, as I own a property there and travel to it every 3 or 4 months. And one of the reasons I signed up was because of the ease of use and the great exchange rate/free withdrawals. The Monzo card is a great asset to me at the moment.
I do also use the card a lot in the UK, where I can, but for me a limited withdrawal of 200 outside the UK (without a penalty) would suck big time. This limit is of no practical use to me (and the reason I stopped using my Revolut account).
I actually do not understand, unless it was to get as many subscribers as possible, why this problem was not factored into the original business model ? I cannot believe that no one had the fore-sight to predict this.
If this happens then I for one will not be using my Monzo card, either in the UK or Abroad as I would need to start watching what I did with the card each time I used it abroad. This issue would then make going back to Transferwise a whole lot easier.
I reckon the £200 per month has been thought through, And the idea is that if it were a much larger yearly, then would lose out big time across the average customer.
Yes £200 per month will give a select few, say people who have family in a European county, the edge, but that is a select few and the hit to. will be absorbable
This is probably unpopular - but to be honest I’d also like to have the option to opt-in to pay e.g. a monthly fee if I was going to go backpacking/travelling to get free withdrawals abroad. So, for instance, options 2 or 3 appeal most to me (2 is my favourite), but then you could also let Monzo know you’re going travelling for an extended period or to a cash-is-king location (I usually use my work holiday allowance in SEA where outside of main cities there aren’t many options to use card, so I like to take out money little and often when I’m travelling to be safe) and then pay a monthly fee to get access to free withdrawals?
Not sure if that would be possible - as personally I don’t think I’d pay more than £15/pcm which might not ‘add up’ - but it would give backpackers/‘off the beaten path’ travellers the opportunity to still use their card fee-free while abroad.
I have a normal HSBC account and the %-based fees I get are awful
What about a tiered payment system? given that to withdraw £1 roughly equates to £0.02 in charges then if you were to charge £3 a month for withdrawals up to £150, £5 up to £X and £10 for withdrawals up to (and over) £Y.
Given that Monzo is open - if there is a way to turn on (and off) the charges - this way a customer would only get charged when used = no unnecessary charges and happy customers
many customers are very fluid - the old rule of “more likely to get divorced than change your bank” no longer applies, however, people are more willing to pay a nominal amount for a good service.
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Option 3 punishes the customers who are the heaviest users of cash withdrawals and that’s why I voted for it.
Why is punishment desirable? Is cash a sin? How about everyone is charged a fair and low fee for the cash they withdraw and we all agree that cash withdrawals are morally neutral.
In short, Option 3 is the cheapest until you need more than £300 in the EU, or more than £400 outside of it.
I had voted for option 1, based on the scenario that if I go to a cash country (like India or Cambodia) for a month, that this will be the cheapest option. However, having done this sheet, I need to potentially reconsider.
If people would find this sheet useful to put in their own amounts or to check my formulas (which I’m known to get wrong), let me know and I’ll upload it to Google Sheets.
I agree, I’m not sure why people withdrawing cash abroad are being described as “offenders” or why some people talk of punishment or abuse. Monzo gained some customers precisely because it was offering such great options for travelling abroad. It’s fair enough that they have to change but withdrawing cash and using a card in line with their terms should not be described as an offence.
In any case, for me option 2 would be the best. The reason I chose Monzo is because I travel a lot and realised my bank was making a fortune off my back. I use Monzo while in the UK as well though (it’s actually my main card) and will consider getting a current account with them. Happy to pay a fee for this if needed as I want them to be a sustainable business.
How about offering different options when current accounts are launched? I would be happy to pay a fee for a current account if I get benefits like free withdrawals abroad (or free withdrawals within a certain yearly limit).
I’m seeing a lot of posts saying most places take card - just wanted to point out that a lot of Monzo’s Millennial audience travel outside of Europe/US, where card is a lot harder to use. I just got back from Myanmar where barely anywhere takes card (I had to find a hipster coffee shop in Yangon to connect to turn on ATM because the wifi was down in my hotel), and I visited Laos with my Mum earlier this year where barely any of the ATMs worked, let alone have places that take card I don’t mean to be rude or anything I just wanted to point that out
Unfortunately it may be the end of the road with Monzo then. Such a shame, I have loved it and have maybe talked 10-20 into also getting one. Being able to use the card for free was one of the main selling points. I do use it daily in the UK but not sure it adds enough if I need to find another option when abroad.Those that say you can just use your card everywhere either haven’t been many places or certainly don’t go to many festivals abroad where cash is still very much relevant.
I’m not sure why in your examples you use the fees other banks use. Surely your rivals here are pre-paid cards from the likes of Travelex which allow fee-free withdrawls (almost certainly at a worse rate but still would have preferred that comparison).
Also, if you are aware of some power users abusing the system, why are you making the service significantly worse for everyone? Is it really less fair to charge those abusers more than to withdraw it for everyone?
After the positive story in the Guardian this week there were many naysayers in the comments section saying that as Monzo grew it would become more like the big banks we all came here to avoid. I argued the case for Monzo but it appears they knew best.
I was one that mentioned the rest of the world would need to catch up I too travel outside of Europe a lot and see this issue… however sadly I take factoring in the extra % or need to withdraw cash into the overall cost of travelling to these places… would be epic if I didn’t have to…
Monzo benefits from people using their card inside the UK for general transactions yes? This is what was great about monzo to start with - to be a new UK Bank with the benefit of being a UK monzo user as being able to use your card abroad and have 0% atm fees and card fees.
The reason that it is becoming unsustainable is from the monzo users who are using it solely as a TRAVEL CARD and not as a general bank card.
I think option 4 should be to reward SUSTAINABLE monzo users with 0% atm fees abroad by using their monzo card in the UK - this can be detected by monzo - perhaps after a certain amount of money is entering & leaving the monzo account each month will enable these users to be “monzo gold”(?) Users that benefit from 0% atm fees worldwide; and those who are just using it as a travel card will have to pay the fees for using their card abroad. This will encourage more people to use their monzo card sustainably in the UK, and if not they are aware of the fees they will need to pay abroad.
I don’t feel that it’s fair that I am being clumped in the same bracket as an occasional user when I am using my monzo card avidly as my bank account - making money for monzo instead of only using my monzo card when I go abroad!
Monzo was supposed to be a personal banking system that should benefit those who are using it properly; the vision that monzo had when they created monzo - and those people who are not using it “properly” (but just as a travel card) should not benefit from the same rewards as I do!
Option 4: same old 0% fees for atm abroad for the sustainable “monzo gold” (or monzo green?) Users that actively use their card in the UK; and then apply option 1 to those who are using it solely as a travel card.
Edit: perhaps monzo gold/green customers wouldn’t be from putting in a lot of money at a time but the frequency of input/ output?
At Santander student account (and most student accounts), I can benefit from the £1500 0% overdraft and 4 year 16-25 railcard so long as £1000 goes into that account each term (3 months) - perhaps monzo could model their ‘gold/green’ customers on that - say £200 must enter and be spent in the UK every month - could be averaged over 3 months so £600 every 3 months; or have limit slightly higher so it incentives people to use their card in the UK, increasing money for monzo and then that would make it more sustainable for monzo to absorb the costs for abroad atm withdrawals?
If monzo released a “sustainable atm withdrawal limit” (could be medium-large sums at once) then this would be an incentive to only withdraw larger amounts at once to reduce costs for frequent amounts of small withdrawals?
would lose out big time across the average customer.
