Super interesting idea 
10 Likes
I don’t understand why people are so much against it. I mean loads of bank do this. Having salary account means more incoming money, and many would become more dependable to the account. When I lived in Estonia there was a bank which gives you Gold Membership (read Plus Account) if you get certain amount salary every month in their account. This is a very common practise in many countries and banks. Of-course some people can move the money to some other account next day, but there will be many who won’t.
2 Likes
“Very common. Loads of banks.”
Monzo isn’t trying to be those banks though.
1 Like
There are lots of ways Mozo can make money, they just seem so slow on it. It will end up become a loss making business that another bank will eventually buy.
I’m all for this idea and it would help me to go #FullMonzo.
For added clarification:
Lloyds Club account charges £3 per month and unlocks a few additional features, however, if you pay into your account £1500 per month or more, the £3 fee is waived. You could still hold a “Monzo Classic” account for no fee, or opt to pay for the “Monzo Plus” account; the recommendation is to waive the fee for “Monzo Plus” if your salary is paid into the account.
Why would Monzo do this?
- Encourage more people to deposit their salary
- Provide predictable income streams for Monzo. It’s true people can remove the balance the next day, though it’s easy enough with Excel to determine who does this and factor it into any calculations made on the back of the predicted income.
- A salary paid into Monzo increases likelihood of bills being paid out of Monzo. This is HUGE (more below).
- Customers who shop for products “direct”, i.e. not through a broker, are more likely to stay with the bank they already have a relationship with - convincing customers to pay their salary into, and bills out of, Monzo is a huge step to build this relationship.
- Likelihood of increased customer usage and growth rate through word of mouth if the product is successful.
Why is that so important?
- Allows Monzo to see which customers pay what bills.
- Allows systems to be built to target customers individually or in segments based on spending behaviours.
- E.g. A particular customer is seen to be paying a direct debit to Santander for £500 PCM, a week later, an advert pops up in their app or some sort of notification with a “Monzo Mortgage Cashback!” message.
- Gives monzo a higher average capital reserve to use for lending.
3 Likes
But it’s now competing with them. They must remain competitive as they aren’t ‘new’ any more and have to play the grown up game.
4 Likes
Agreed. But there are certain things no FinTech can ignore like having bigger market share, growth.
in my eyes, its not fair on people with lower incomes who would like added on benefits
1 Like
but I don’t have a flat in Monaco for the same reason. It’s the reality I’m afraid.
2 Likes
Seems a shame to penalise customers for paying in their salary. 
6 Likes
Humorous.
Indeed. But neither of us know if this is the right tactic to ‘win’ the game…
Agreed. But again, how do we know this will help with that?
Looking at other banks, offering £100 to switch your account would seem to be a better/quicker way? (not that Monzo have funds for that)
This also completely leaves out those who do have their salary paid into Monzo, but their employer pays via FP rather than BACS.
1 Like
True although easily solved by ‘pay in £x every month and get product y for free’. But I don’t agree with it - it goes against Monzos values IMO.
1 Like
I’m not sure about the logic behind your statement here, can you please elaborate?
Given that Monzo targets people who want to get better control over their money and might have tighter budgets etc, I would expect that they might set any threshold lower than the average bank (not sure if this would make it not worthwhile for them though?).
Someone aged under 25 on minimum wage would take home a lot less than £1500 for full time work.
I get that sometimes that’s the way the cookie crumbles, but I still think that if Monzo announced this new feature “pay in your salary to get free plus” but excluded people on low salaries, they’d alienate quite a lot of people on low incomes (even though they’re no worse off than before).
Maybe they could get round it by combining it with some concept of loyalty. Something like if you’ve had at least X much going on each month, and Y going out, for Z months in a row you get it.
Not if they used salary classification the way they do for salary sorter, aka, any incoming payment over £x, regardless of whether it’s via BACS or FP.
1 Like
Why can’t you?
Sure, are you familiar with the Your Monzo section at all? One of the badges is for paying in a salary, but this is only recognised if you are paid via BACS. FP salaries don’t count.
So if using the same system, only the BACS payees would be granted the offer and those on FP wouldn’t be eligible.
Although as @lpoolrob said, it could be based on an amount instead.
2 Likes