As many of you will know, Monzo recently shut its Las Vegas office, reduced headcount in the UK and have taken steps to make support harder to contact (i.e. more reliance on self-help and less support at night)
All these changes, bar the closure of the US office, were blamed on Covid 19 and the need to save costs as debit card use had reduced leading to a fall in interchange revenue earned by Monzo.
As such, I was interested to see the BBC report that debit card spending only fell slightly during April (the first full month) compared to a year ago:
With shops closed, the use of debit cards was down 5.1% in April compared with the same month a year ago.
Contactless payments saw a significant drop, as many people were working from home and making fewer occasional purchases, as well as commuting less.
However, with the limit on contactless payments having risen from Ā£30 to Ā£45 and some shops refusing cash, the average purchase using this technology rose above Ā£10 for the first time.
This compared to an almost 50% fall in credit card spend.
Have to say, given Monzoās actions I was expecting a lot more than a 5% reduction in debit card spend
Not every customer is the same and not all banks will have been effected equally.
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tbutz
(š³ļøāš Producer of "low value commentary")
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Iām just trying to work out what the purpose of this topic is. Is there a point? A question? An accusation? Or are we doing the āletās just put some facts together to lead to a narrativeā thing?
The BBC article (linked in my post) quotes UK Finance
While I read somewhere on these forums so that these fees had changed to %'s and not a fee per transaction - in which case its total spend thatās important not the volume of transactions
Agreed, though Monzo doesnāt actually lend much compared to the level of deposits it holds.
Sorry just want to point out an amusing comparison. Monzo had financial woes pre COVID and is shifting the blame to the pandemic, but N26ās issues were definitely all brexit related as they said and there was nothing else going on? Just seems a little unfair to think the worst of one and the best of another.
I donāt want to get into a back and forth so Iām leaving it here, but you literally did that that
Regardless, they didnāt use it as an excuse, itās just been said by staff members on here that the data showed that card spend and frequency was drastically down for Monzo. There may have even been a figure given, but I donāt remember so Iāll leave it for someone to hunt down.
I thought the subtext was clear, in that while Monzo had already planned to focus on revenue generation and covering costs, for the post year, the onset of Covid and the fall in revenue resulted in further actions which were not previously planned (unlike the US closure).
As @anon95680666 says no doubt the actions were also influenced by not closing their funding round pre Covidā¦ its just I would have expected a much sharper fall in debit card usage than seems to have been the case.
I wonder if the type of people who use Monzo spend less on credit cards and do most of their spending on the Monzo card instead thus those figures affect other banks more?
Could discretionary spending be done more on credit than debit card, hence the difference?
