No
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They don’t, just the raw figure of 70,000. I do agree with others that only 130,000 customers paying for premium accounts needs to be higher. The fact they’re still being invested in, is good though.
It was 100,000 not long ago.
If they were all paying £5 per month that’s £7.8 million a year
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But monzo have taken on over a million new customers in the last 12 months, so the Plus revenue would only amount to £8 per year per user (accepting that some Premium customers are paying more, but then we haven’t even considered the costs of the fancy cards or insurance services, or that each of those million new users need a basic card printing and sending out).
I’ve said it before, but 2.6% of the user base isn’t going to subsidise the other 97.4%. That’s not going to be a viable model.
#fullmonzo accounts make money, lending makes money. Make the basic account as good as it can be and you’re more likely to get switches and cross selling.
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Plus started in June didn’t it? Premium was Sept?
It’s going to be a gradual increase.
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Plus and premium customers are more profitable than full Monzo customers.
Paid accounts are just one revenue stream, alongside many others.
You’re making a lot of assumptions based on one or two data points - and they’re inaccurate assumptions.
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As far as I’m aware we don’t think about the concept of specific customers being profitable or unprofitable but specific segments.
It goes without saying though that somebody who uses their account as their main bank will be more profitable than somebody who uses it just for paid early and then transfers their salary to another account or somebody who just uses it to buy crypto.
My experience is also that the majority of paid for customers are also full Monzo and therefore they’re more profitable.
The exception to the rule is, during normal times, people who mostly use Monzo for travelling and I’m pretty sure they’d also be profitable as a segment because of the higher interchange fees - even if they aren’t ‘full monzo’.
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There are some massive assumptions here that are dubious. I don’t think the Plus features being provided for free would make much of a difference to how many people sign up for and then use Monzo as their main account. I do think those features are very useful to a certain segment and are good value to those people. Charging those who want them a modest monthly amount seems very sensible to me.
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Now there are paying customers, why should the non-payers get the good stuff?
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I think (in time) things will cascade down. They’ll make something that’s in Plus free for everyone and then give the Plus people something new.
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£60/yr for Plus pales into insignificance when you could be using the basic accounts to lure people in and cross sell a few loans and mortgages… that’s my point, but I guess we’ll agree to disagree.
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Unfortunately, that debate is over and they decided on a freemium model. I agree they could perhaps have done things differently, but there isn’t much point in relitigating that, because they are now committed and really can’t go back. They see themselves more as revolut (selling features) than a traditional bank making money from lending (selling financial products).
Plus is here to stay, and the incentives of that business model dictate that new features will go into the paid tiers almost exclusively. Having accepted this I’ve tried out Plus and found a few things that feel worthwhile, I imagine enough of their customers will feel the same to make it viable.
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So an actual revenue stream that exists right now pales in comparison to a hypothetical revenue stream that you’ve just made up and that would require more development work to build?
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I do realise that Nationwide is making shit tonne of money off me without lifting a finger. Not using the account at all, and all I do is maybe change the mortgage direct debits once a year, and they collect all that mortgage interest.
Sure doing the mortgage application was a massive hassle but now they are just raking it in.
I understand that mortgage underwriting is competitive, capital intensive, and needs scale. But it does look like really good money.
I doubt that current accounts make any other bank any money. It’s always a liability, and is just a customer acquisition mechanism. Monzo has current account, joint account, savings accounts, loans… And hence people are demanding feature parity on the joint accounts & asking for a credit card. After that we will demand mortgages too.
How does the loan UX look like? Is it suitable for mortgages too?
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Monzo needs to find better ways of making money - plus, premium and salary receiving accounts won’t make the big bucks
Come on Monzo speak to a US bank with a load of money and get bought out then use their money to offer mortgages, credit cards, insurance, loans, bridging finance etc etc etc
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I won’t say never, but we have no plans to launch mortgages. It just isn’t a segment that makes sense to us.
Hopefully you’ll see us launching some borrowing products/services during this year and we’ve got other great stuff planned. All of which will help with that important path to profitability.
Just watch this space.
I should have added (and this is just my personal understanding - not something internal!) but that mortgages aren’t really that profitable to launch. Until the capital has been repaid then it’s a loss, irrespective of how much interest you’re paying. If you’re an established lender which has an ongoing mortgage book it’s different - but if you’re starting afresh it might be 25 years before you see any profit on paper (depending on the length of the mortgage…)
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Is there a particular reason why? Or more of a moral decision?
As I see it, yes
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Hi! To find out what I can do, say @monzobot display help.
Right now? I very much doubt it!