Monzo in the media

It’s baciacally, “Where I started” and “Where I am now”.

The articles is from 6 years ago today when he joined Monzo, Fronted is the company he recently founded

But that’s not how it started. Surely how it started would be his first day at Bank Possible, or a financial institution he worked at before if there was one, to today. The first chapter if you like had already finished when he left Bank Possible. 6 years to the day is 6 years to the day. How it started is how it started. Weird.

It’s like he’s one of us old people who hasn’t quite got the hang of the trend so tries their best and gets laughed at by the internet for doing it wrong… not that I know what that’s like at all. :flushed::see_no_evil:

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The article is mostly about recent fundraising, but also mentions Monzo now has 130,000 Plus/Premium users and 70,000 business accounts.

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Which puts Plus/Premium uptake at 2.6%.

Given the amount of developer time devoted to it, and they way they’re hobbling the basic product, I’m not sure about the economics of this :thinking:

I can’t read the article because it’s paywalled. How much development time was devoted to it?

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What would constitute successful to you?

I have no idea what percentage of customers other banks manage to attract to paid accounts, but my hunch is 2.6% of all customers or approx 9% of salaried customers (assuming approx 30% of accounts are salaried by Monzo’s definition) is pretty good going.

(particularly since it’s less than 1 year since launch)

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If you’re going to invest time developing software that could - for very low costs - be rolled out to the whole customer base, improve the product, drive sales and account switches, make more people go fullmonzo, then 2.6% sounds poor to me.

If you’re throwing a few insurance products together and calling it a bundle, then 2.6% or 9% of salaried accounts actually sounds fairly reasonable.

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Do they mention how many of those business account are the paid for version?

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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The increases in lending, increases in post-COVID interchange fees, reduced costs from less staff etc.

I think Monzo’s got a pretty good route to better profitability compared to last year.

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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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Am I a profitable customer for Monzo? :stuck_out_tongue:

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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