Signed up about ten minutes later and card is due on 1st April!
I think the category or tag option would work well, as long as you can go back over your month and review payments. It would be great to do that in one step from Monzo to Xero (with Tripcatcher your mileage claim appears in Xero as a draft expense claim with one click) but an interim step via Zapier or IFTTT might be a solution for now. Or a dedicated app that acts as the bridge.
One issue Tripcatcher have had is that the email address for the Tripcatcher account needs to be identical (even upper/lowercase usage) for the link to work. For a mileage app it is easy to change email address but I wonder if, as a banking app, it would be harder with Monzo. The other option is to change Xero email to match Monzo. It is always an issue for me as I use gmail aliases for each login to make them more secure.
It would be interesting to know if Xero could support a feed from Monzo where it ignores most payments but only adds tagged items, or items that you flag up, to your business accounts. My worry is that if I linked a personal Monzo feed to the Xero account of my ltd company, it might end up trying to account for those personal transactions within my business finances. My guess is that using an expense claim set up would be the neatest answer to avoid any blurring between business and personal.
Keep me posted!