I would say it was more of a shortcut for a better user experience, not having to figure out a way to tell users why in some cases they get overdraft charges and in other cases they don’t.
At the moment it’s simple, main account balance below -20£ (the free buffer) means overdraft charges. If they were to take pots into account, some users might go below -20£ and still not get charged anything, and start getting charged once they go below a seemingly random amount (the total amount of their pots combined), leading to extra support queries, etc.
No. But did you read through that thread? In particular my comments in it, to see why I have a problem with that blog post? And why I feel it steers people into a direction that may cause problems to them, purely for Monzo’s benefit?
Explained, yes. But “I’m sorry if it annoyed you” is not an apology, or change the fact that it’s pushy!
I can see the argument for it to be counted but when I have money in pots I don’t want them included in my balance. They are separate so I can’t spend them. By allowing them to count it would mess up my planning.
If there’s a notification that I don’t have enough money I can then choose to transfer if I want. If I go into my overdraft I can transfer it the same day to avoid charges.
I don’t think they are being forceful, just overly enthusiastic about making people they are aware
Starling still show you a negative balance but they just use your pots as a buffer to avoid you paying them when they have no legitimate claim to charge you… Because they aren’t actually lending you anything at that point… Technically you’re lending to them!
Still, it’s much more confusing to not be paying interest when your balance shows you should & to have to check your Goals (Pots) to see whether enough money is in them.
I’d imagine that users could be caught out by seeing that their main account’s in a negative balance & thinking that, that’s fine because they have money in their Goals so they won’t be charged. When in fact they don’t have enough money in Goals & end up being charged.
With this design, you know that when your main balance - the one on your home screen - is in the red by more than £20, you will be charged. Simple.
Yes, it’s simple. It’s also convenient (for Monzo). And it’s wrong! Because I’m always right!
But doesn’t Monzo want to make the complex things simple? Surely this is a problem that can be solved. Otherwise why should I use Monzo over my high street bank?
Very practically, leaving aside the legal question (which I am not competent to answer), and the ethical question (which I am convinced is quite grey), from a product perspective I see Starling’s approach to this particular question as far superior:
Monzo is behaving a bit like my high street bank here (only worse because they insist their pots aren’t separate accounts, until it suits them): If I want to save with my high street bank I need to open a separate savings account. If I have money in my savings but not in my current account I pay overdraft. It’s simple, but also not ideal (from my perspective!)
If I want to save money with Starling it works a bit like an offset mortgage: I can have money in savings, and if I have a sudden large bill, I don’t need to move my money out of savings. I can just wait until pay day. Great!
(Not saying that I’d advocate saving large amounts with Starling, as the interest is meagre, but that’s a different discussion.)
This brings back memories of The One account, although I never had one myself.
“The type of offset products offered by The One account are called Current Account Mortgages (CAM). As the name suggests, customers consolidate the balances of their mortgage, traditional current accounts, personal loans and, if desired, their saving accounts into one account.”
Me too but I don’t think that users will end up paying because of this.
To be clear, I agree with the idea that if there’s enough money in Pots to cover the negative balance (of over £20) in your main account then you shouldn’t be charged for being ‘overdrawn’.
But for me, this is a design UI / UX problem because it needs to be simple to understand / manage & I don’t think anyone’s really solved that yet. In my opinion, Monzo’s approach is the easiest to understand.
You can if you like but all that’s going to do is show us what people think in theory, not what users actually do & they’ve often very different things. The overdraft pricing is another example of this
Monzo has the data to see whether lots of users aren’t moving their money out of Pots when they’re overdrawn so they can address this if they need to.