I know this will probably go against a lot of other peoples opinion but here goes.
I was an early adopter to Monzo when it was in beta, user 6049, and I have also been an Investor since I was first able to buy ‘shares’. I know that COVID had a huge impact on finance (and everything else) but following the last investment round I was informed that the value of my shares halved according to an announcement from Monzo.
My main bank is currently Lloyd’s which I keep due to the account benefits which I will keep, mostly for my joint account holder, and will do so for one more year then I will leave Lloyd’s as I think their customer service is awful and I have grown to dislike them as an account holder of 35 years.
I currently keep £500 in Monzo and I’m about to start shifting direct debits to my Monzo account, pay money in and use it as my main account (albeit keeping enough in my Lloyd’s account to pay the extortionate £28 a month fee for the last 12 months).
My point is that it would be nice if Monzo has reduced the ‘Plus’ fee for investors (and possibly early adopters) as I’ve never had any kind of ‘perk’ for supporting this bank whereas although Curve is a totally different beast they have acknowledged me as an early adopter.
As I say, I’m sure many will disagree but it would have been a nice touch from Monzo to support those who supported them at the start and through investment.
One final point, I actually think the benefits of Plus are actually quite good and well thought out.
Nice to see a clearly thought out and articulated post .
I would be surprised if this wasn’t something that had been discussed; it’s very similar to the BrewDog model where you get perks even if you only have 1 share.
Personally I don’t think that giving a discount like this is viable while the company is still trying to turn a profit. Especially because my guess is that the most likely customers to engage in a premium offering are also pretty likely to be the highly engaged customers who are also investors.
If you invest in Plus, you are helping your shares. In 10 years you would have paid only £600 but that money would have improved Monzo’s stats and valuation, helping you.
Brewdog’s model, as I understand, is you can’t sell the shares. Not only that, but it’s brand lock in. So getting a discount probably makes them a lot more money than they would otherwise. In fact I have a friend who invested and he pretty much only buys Brewdog now.
Edit: to add I’m a first round investor as well and have invested in every round.
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Anarchist
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I suspect that looking at Plus as an investment would be poor advice.
It’s not an investment for the individual, you give money to get features/perks.
But the more people on plus, the higher the value of the bank, increasing share price in the long run.
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Anarchist
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From a purely selfish financial view, though, for an individual to increase their return from the benefit to the bank from Plus, the best strategy would be to let other users buy Plus. The individual gains the same investment return without ‘investing’ £5 per month.
Yes, I agree that I hope that Monzo does start to turn a profit one day soon although it is a tough marketplace. I use Curve a lot due to its USP and Revolut very occasionally as it enables me to buy foreign currency at great rates for my annual holiday. Both these banks offer premium accounts however Monzo is the only one I would realistically benefit from. I am glad they haven’t gone down the ‘usual’ perk route. I just feel that investors and early adopters or ‘beta users’ as its listed in my profile should receive acknowledgment for their support. Your response though is very good. Thank you.
There’s far too many people seemingly getting Plus 'to help Monzo out/‘influence’ their ‘investment’. Get Plus because the features appeal to you. I also think people expect too much from Monzo just because they’ve invested a relatively small amount. You got some shares and an investor card - pretty much what you paid for.
The last Plus wasn’t worth it to me as I got far better benefits from Lloyd’s, this is a totally different setup. All I am saying is a little bit of acknowledgment from Monzo would have been nice, especially for those who helped build the business from very early days.
While I can vaguely see where you’re coming from with this, the fact is you bought shares in the company at what everyone thought was a fair price. ie - you haven’t “supported” monzo by doing them favours or donating money to them; you simply swapped some cash for a small stake in the company. That trade is done and dusted, it’s in the past, and no one owes anyone anything. As with all investments, your payback will come if/when monzo’s share prices rises.
I disagree, by supporting Monzo it enabled them to continue where others have failed. It’s hard to build a bank and Monzo has yet to turn a profit. My investment was not huge and only £1000 (which could be lost if the bank fails and I accept that risk). My early adopter badge also is nothing to boast about but both have been there a while and customers and investment are why it exists today. I really love this bank, much more than Curve or Revolut and personally I want it to succeed long term. All I am saying is that a little acknowledgment would be nice, after all original plus members are being acknowledged for much less.
I’m pretty sure Monzo has never had difficulty raising funding via professional investors. They didn’t need financial support from individual users via crowdfunding. They likely did it to increase engagement and media attention.
Anarchist
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I’ve just realised that, although I’ve contributed to this thread above, I’ve not addressed you initial post. Apologies.
You said:
And I agree. It would be nice. Whether it makes any sense from Monzo’s point of view, I rather doubt. It’s not as if you can remove your investment from Monzo. At best, all you can do with it is pass it on to someone else.
Also, you say
It sounds like you and I are very similar Monzo customers (though I’m not an investor). We both keep some money in Monzo, and (speaking only for myself) do a bit of spending through Monzo. I, too was considering making more use of Monzo, until a poor CS experience put me off some months ago.
The Monzo CEO might well look at my account, and determine that it’s not making any money for the company. In fact, the likelihood is that it has been losing Monzo money. That CEO might send an email thanking me for my ‘support’ through the company’s early years, and encourage me to take my support elsewhere in future.
In short, my view is that I agree that it would be nice to get a perk from Monzo, but would disagree with those who think that investing in a company, and using its services, entitles them to any perks. For clarity, I’m not for a moment suggesting that this paragraph applies to you, but it does apply to some people.
Thanks for your reply and I do agree with you, an investment does not and should not be seen as a way to gain perks however all I am saying is that would be a nice touch from any company you invest in, and I’m not talking about those who invest £10 to gain an investor card, to be acknowledged in some small way. For example old ‘Plus’ users get 2 months free for taking up a £6 addition. My post, and I know you don’t see it that way, is not a rant it’s just an opinion for those who may view it that way. Thanks again for your excellently worded reply.
This is key; I would support a discount based on desirable behaviour (as in behaviour that increases CUE value) rather than previous investment.
My understanding of the reasons behind creating a premium offering even though it creates a hierarchy of customers (which I believe Tom & co. wanted to avoid initially) was:
Profitability
It was the main feedback to the question “What do we need to do to make Monzo your main account?”
Above is just my interpretation from open office & community events, investivals, blog posts etc. and I could be way off the mark. Assuming that my understanding is correct, in my opinion, the current Plus tier is targeted at point 1 and the rumoured “Premium” tier would be targeted at point 2.
So the aim of the current iteration is to bring in revenue and offset the cost of developing new features but also to increase the appeal of running most of your finances through Monzo (double revenue generation for Monzo ). With that in mind I think it would be reasonable for Monzo to conceed some of that back to customers generating that profit but ultimately if customers are willing to par £5/mo and not get the kickback then why give any of it back?
The interest on balances is essentially this same principal; Monzo are earning BoE baserate on your deposit and stumping up the additional interest to bring it to 1% AER (loss making) but by virtue of your cash being in the account the chances are that you’ll make more card transactions etc. to make your account more profitable.
I suppose that the team will take a look at the uptake of the product and if it’s not reaching the levels that they expect then the kickback might be something they consider.
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Anarchist
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I suspect they see the 1% interest as just a cost of providing Plus. It’s paid for out of your £5 pm.
For me, however, the question is whether the £5/month Monzo receive from (what I suspect will be a relatively small) group of users, is worth more to the business than number of new sign ups and fullmonzo conversions that might have been achieved had all these features been offered in the basic current account.
Worse still, I fear that Monzo will now be forced to keep a gap between the Plus and Basic accounts, which is likely to narrow the gap even further between the Basic account and Monzo’s banking rivals, and cause long term damage to sign ups and fullmonzo conversions.
Monzo would surely do better to make their 4 million regular users profitable, rather than focusing on a tiny fraction of Plus customers.
100% agree with this. Sad to see new features on the plus account not incorporated to the regular banking app. The way to attract more users is to make the standard offering the best out there.
Plus should be reserved for additional benefits that don’t directly improve functionality of the app. i.e. additional withdrawals abroad, insurance cover etc. Whereas customisable categories and seeing balances in other accounts should go into the regular offering on the app.
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). With that in mind I think it would be reasonable for Monzo to conceed some of that