So I was looking at Coconut (formerly known as Monizo) earlier. And it struck me that the product seems excellent and - in a hypothetical world where they have more cash - Monzo could do worse than a sneaky acquisition to super-charge their business accounts.
Then I looked into the Coconut business model: they seem to be pivoting away from providing their own current account into be a value-add layer on top of banks (including Monzo). So you have your business current account, but Coconut does categorisation, taxation and accountancy stuff over the top.
That left me wondering: if Monzo did acquire Coconut, would they maintain the over-the-top layer? So you’d be able to have use the Monzo app (for a monthly fee) without having a Monzo business account.
Then that led me into thinking about a thought experiment for the personal current account: imagine Plus with native Monzo features (bill splitting, open banking, notes, categories, budgeting - even pots) on top on a legacy current account (First Direct, say). Basically, connect your current account, use that card and get the features of Monzo for a monthly fee.
Part of me thinks this is complicated and dilutes the proposition. Part of me thinks it’s genius and would help with customer support, significantly increase revenues, reduce costs and act as a funnel for a proper Monzo account.
I’m not sure how they could achieve things like bill splitting and creating pots if they aren’t the ones holding your money? I guess bill splitting could be achieved with partial card refunds or something but seems like it’d get a bit messy.
The categorisation and budgeting they could do but Emma, Yolt, Moneydashboard are already doing those bits really well for free.
I loved coconut for business banking also invested and just upgraded the the £12 a month account, but as soon as you hit x transactions you then have to pay 20p per transaction, so joined Monzo Business £5 a month
So I think pots is straightforward. It’s a logical separation of your money - like envelopes - but not one that’d affect the way the underlying account works.
Bill splitting I’d see as the same way as now: you’d want to create a network effect within Monzo so you’d either have it in the app (request to transfer money that gets done by open banking to the right account) or via monzo.me (payments go directly into the specified account).
I think Monzo’s gonna need to compete here (that’s the way they’re going with Plus). My idle musings about Coconut were to get a step ahead on the business side. I suppose there’s no reason (money allowing) for them to pick up, for example. Emma and port over all that stuff. I think (or is it that I hope?) that we’ll start seeing that natively through Monzo Plus / Premium over the next week year, though.
