How does Monzo make money?

Monzo doesn’t have any products which generate significant revenue at the moment. Tom has been reported as saying that


then when the overdrafts are launched

I’ve provided more of a summary of Monzo’s plans for it’s product strategy / business model here this morning -

if there’s anything else you need to know, it’s probably been mentioned somewhere else in the community so please feel free to ask :slight_smile:


Turns out Monzo is actually losing £50 per user, per year until the current accounts launch.

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How will Monzo make money?

From (page 13)

“In the short and medium-term, Monzo will make money by lending out deposits, without hidden fees or charges”

“Long-term, profit sharing and affiliate fees on third-party products will be the main source of revenue”

I’m guessing that profits from Monzo’s clothing range might just about cover a round of drinks on a Friday afternoon :joy:


Yeah, pretty confident they mean financial products, not merchandising!


Yeah, I was thinking about a third revenue stream!

Just curious. It look like you nearly dont charge any fee from customer so how your get a revenue.

This has probably been discussed a lot already (did you search?), but to summarise: overdrafts and marketplace functionality (e.g. relevant offers for your utility needs, potentially cashback deals etc).

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Not if they invited me, it wouldn’t :wink:


Somewhat irrelevant to the conversation about our business plan, but all the profits from go to Turn2Us :heart:️. They do amazing work fighting poverty in the UK, and you should totally donate to them, as well as buying t-shirts :wink:


I’d like to re-phrase the original question, if I may. As a Monzo believer (and an investor) I would like to do whatever I can to help Monzo succeed - but I draw the line at unnecessary or overdraft fees (sorry! :stuck_out_tongue:). So my question is: what would be Monzo’s ideal (most profitable) usage scenario right now for someone who is just operating a ‘normal’ current account? As there’s currently no lending, and therefore no net interest margin (NIM), how does Monzo make money from other activities? Is it benficial if I direct more spending through my Monzo debit card? Hold a larger balance for some non-NIM reason? Set up bills and direct debits? Just spread the word to friends and show off the app? Or even just not use the account much at the moment??

I realise that the costliest customers were most likely those using it exclusively to withdraw large amounts of cash from ATMs in sub-saharan Africa, but who are the most lucrative?



They certainly aren’t keen on any ATM cash withdrawals.


This is a great question!
I can posit two answers:

  1. spread the word. The higher the customer growth, the easier and cheaper it is for the business to raise funding (which for an existing investor like you is a very good thing). VC investors buy in because they believe it will achieve scale - so help prove them right.
  2. borrow. That’s how banks make their money. If you don’t want or need to borrow, then do as little as possible. Maybe wait for the day they offer bike or phone or travel insurance, then buy that.

Interesting article (opinion peice) I saw in the FT…

Oh dear. No wonder there is a push to control costs.

Here’s what the author of that story’s missing, according to one of Monzo’s co-founders Jason Bates (& me)..


I think I roughly agree with your points. It just sounds like usual resistance to change !

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I really like your dissection of that article. The author made a lot of assumptions, I thought.

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The problem with being a pioneer is that it leaves you vulnerable. Your competitors can learn from your big mistakes, whereas you can’t afford to make any.

I hope Monzo figures it out soon. I’m still kicking myself that I missed the email about the latest round of investment – wasn’t there in app updates last time? Ugh.

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How does Monzo make money? Plus and sub-standard quality of debit cards, that seems to be the opinion.

Correct, this is how Monzo make money :slight_smile: