So I’ve been to the barbers. Cash only. Took out £20, cost me £12. £8 change.
There’s a newsagent next door that does PayPal. And a post office down the road. If Monzo offered either of these options for free (and there was no queue) I’d just pay in my £8 change. If the fee was £1, I wouldn’t use it, as it wouldn’t be economical for me given the small amount I’m paying in. If I had £500 to pay in I probably would use it, though.
I have another bank account with branches and everything. I wouldn’t think about depositing that £8 with them as there are no branches where I am. And when I do go in they always insist on trying to teach me to use the machines (i know how they work, but when there’s no queue I quite like a bit of human interaction).
What do I take away from this?
Firstly, while we haven’t had the provider confirmed, Monzo is likely to have many many more places to deposit cash than your common or garden high street bank.
Secondly, this convenience would drive me to using the feature much more than I’ve ever done with my high street bank.
Thirdly, given these two (and that this service will cost Monzo money) there’s a likelihood that usage might actually be quite high.
Therefore, it’s a prudent move for a fledgling business to ensure that it doesn’t accidentally haemmorage cost. I don’t like paying fees more than the next person, but if we want there to still be a Monzo in a few years time, it needs to be sustainable.
Two more general but super important points to make:
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This is all a symptom of a broken banking system. Banking is not free in the UK. We think it is because people pay outrageous fees and charges. Which are mostly regressive with the poorest subsiding the richest. There’s a bigger issue at play here.
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I remain optimistic that when Monzo is profitable they will look again at their cost base. If (and as yet this is unproven) the marketplace is where the money is, I’d be hopeful to see things like overdrafts and payments in come down in cost over time. 10p for each sounds like a nice aspiration.