I’d put it to you that the biggest change has been the banking license. Does regulation of that scale, stifle innovation?
On a 3 month minimum term, plus generates £15 revenue, with £4 initial overhead for the card. We’ll ignore the variable overheads for a second. Two child accounts would generate £12, but cost £8 for two cards.
On subscription alone, you’re not off to a great start.
This probably makes it a little bit harder to control, too. With Plus, Monzo can add features at their pace and change the offering to make it more enticing for customers to maintain their membership. If parents find their children aren’t using their card, there’s little Monzo can do to make them.
Well, that depends. See, adults have standing orders and direct debits, alongside their card and cash transactions.
Children, with a much, much lower disposable income (?) have a choice of card transactions or cash withdrawals (on average - I don’t see a 12-year-old cracking out a direct debit for a contract or subscription).
Given we already know how much of a problem cash withdrawals are for digital banks, is it actually cheaper to maintain with those things considered?
Don’t get my wrong, I’ve been banging this drum for years and when I worked in the education sector, I regularly despaired at how little curriculum time this was allocated. Personally, I can’t see how Monzo can do this for profitability reasons. Social enterprise/educational purposes - yes. Profit - I can’t see it.
I may well be wrong, and in 6 months we might see Starling talking about how they’re making 5/10/20% of their revenue from children’s accounts, but until we have anything more than a handful of people saying they’d pay, I’m not sure it’s a given line of profit.