Costs to Monzo

(Richard Bairwell) #1

The Changes to Debit Card Top Ups thread and previous threads about ATMs and international fees did have me wondering what sort of costs are incurred upon Monzo for accepting/making payments. Obviously, quite a bit will be confidential, but something like:

  • Receiving a Direct Debit: 1 unit
  • Making a Direct Debit payment: 0.5 unit
  • Receiving a top up via card: 10 units
  • Replacing a card: 50 units
  • Making a payment on debit card: -2 units
  • Making a payment on debit card via Android pay: -1.5 units

[i.e. We know if we send money to Monzo, it’ll only cost Monzo 1 unit whereas if we were to add money using a debit card it’ll be 10 times as much. I wouldn’t expect a definition of what a “unit” is nor “exact” figures, just guidelines/approximations]

So we, especially us investors who want Monzo to be successful and profitable, can at least try and “do things in the way that cost Monzo the least amount of money” (such as sending money via a big single direct debit to the account every month instead of lots of little “top ups” and get as many companies taking money via debit card - but not Android pay - as possible).

(Jolin) #2

I would be very interested in the relative costs. But… if Monzo wants to have millions and eventually one billion customers, there’s no way they can rely on the few of us who are more involved making the ‘right’ decisions to reduce their costs. There has to be a structure that is profitable on the whole, so that individual decisions you or I might make have no impact on overall financial viability, even if a single decision might cost Monzo more. Once they get to the scale they want, whether a few of us are consistently making lowest-cost decisions or not will make effectively no difference.

The other concern I have, is I don’t want to feel guilty for using a feature (like Apple Pay), and so things should either be part of the core product and free to use as I want, or charged for outright.

As I say, though, I’m still interested in what the relative costs are, but I’m not sure we can use them for much that will affect Monzo long term.

(Christos) #3

Some of these would be one-off costs (e.g. card replacement) whereas others would be a percentage (e.g. receiving a top-up via card).


As an investor as well, I can’t help thinking it’s too big a leap for the general public to “help their bank”. I think most of the population are looking for banks that help them, which is fair enough. I would expect, over time, that the answer will be to either phase out topups, or charge for them as they become edge cases when most people are getting their salary paid in. The really clever bit is, especially when coupled with bill splitting. That’s a very powerful tool which doesn’t have an obvious alternative. It’s a great USP (especially against legacy banks) and I would hope that it can be funded from overdraft interest and other revenue streams in the future. It is not only brilliant to use, but also good when you don’t want to give everyone your bank details, for example on a stag weekend when there are lots of people and some you may never see again. Paym might also help here, but even after five years, I actually know very few who are signed up.

(system) closed #5

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