The only problem with the location thing, is what happens if you’re just out for a leisurely stroll around town (or worse yet live 100m away from a Tesco express like I do).
I’d be inundated with notifications saying “oh no don’t shop/ go/ spend money here - you’re over your budget!”
Yeah true but that brings us back to ‘friction’, would you rather a notification that alerts you to being close to your budget, or none and you only discover when you try and pay?
Monzo already do that though - when you make a transaction and it brings you close to your budget, you’ll get a notification for it - you’ll then be told every transaction if you’ve gone over that you’ve gone over.
Stopping the transaction is pointless as whether you had enough money (in that budget) or not you were going to make that transaction - you’re not being stopped because you don’t have the money but because you haven’t managed it yourself.
Also if I need to make that payment, but I haven’t factored it in (say a large expense like car insurance) - I’d be stuck in a perpetual loop of being declined. Whereas in reality i’ll just exclude it from summary once the transaction has completed.
Warning me about going over shouldn’t be location based as there is no guarantee I’m about to spend money.