Starling Bank Chat (Part 2)

[j06 (Jamie)]

@ndrw

business model

This still intrigues me. Monzo made such a song and dance about the losses it was enduring by offering free foreign ATM withdrawals. Meanwhile Starling has quietly, consistently managed that, and now Virgin Money does the same. It must be possible.

[RSheff]

@ndrw

I think the problem was that they wanted to get a product through the door and launched as a prepaid card advertising fee-free foreign spending so people started thinking of them as a travel card and nothing more.

That was Monzo’s big mistake because many people still think of them that way.

[Gavinator (Gavin)]

With some of their actions and they way they prioritise shiny things over basic account features (like cheque scanning and international payments), I think at least part of Monzo still sees itself that way.

Starling on the other hand, already have everything you would want from a bank, but they also have the good parts of Monzo too.

[jzw95]

@j06

the losses it was enduring by offering free foreign ATM withdrawals. Meanwhile Starling has quietly, consistently managed that, and now Virgin Money does the same. It must be possible.

I’m sure it’s possible if you don’t have very many customers (or very many using this feature). I see Monzo cards being used all the time around here (as in several times a day if I’m at the shops), but have never seen a Starling card. I think the numbers change how viable a feature like this is. It’s also undoubtedly true that Starling has a banking service business, so maybe it makes a small loss on overseas withdrawals but subsidises them with other parts of the business. The main point is that these are different businesses in terms of scale and focus, so the fact that one can offer unlimited fee-free cash withdrawals doesn’t indicate anything about the other.

@TTJJ

Seems closing the forum was the right move for them after all.

Yes, it means this forum gets to deal with the bitter, insecure, consistently negative Starling customers who have no other outlet.

[ysconhb (Jenny Linson)]

@jzw95

I’m sure it’s possible if you don’t have very many customers (or very many using this feature).

How many customers did Monzo have when they introduced the foreign ATM charges? It’ll give us a guide for when the tipping point may be for starling to have to start charging.

[Anarchist (Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)]

@ysconhb

How many customers did Monzo have when they introduced the foreign ATM charges? It’ll give us a guide for when the tipping point may be for starling

I don’t think it was the number of customers per se. If I recall correctly, it was that a substantial proportion of customers were withdrawing a lot of cash overseas. Caused, perhaps, by the perception that Monzo was an overseas spending card.

[anon75400416]

@Anarchist

Caused, perhaps, by the perception that Monzo was an overseas spending card.

Monzo probably don’t help that perception

[ysconhb (Jenny Linson)]

I see. So as other people seem to be saying it was more perhaps about poor positioning initially as a ‘travel card’ or beer money type extra card to load and use occasionally, rather than as the comment suggests then slightly rows back on; because Monzo has so many customers compared to Starling.

[xnox]

Prepandemic starling sort of mentioned credit card in one I review or the other. Then pandemic. Then they launched connected support card thing. I guess credit card is paused for now. But I wonder if they will be able to launch it whenever pandemic is over?

[j06 (Jamie)]

Not really paused I think, they do say it’s in development, to people who ask about it on Twitter. But obviously business banking took over during the pandemic, with the loans.

The thing with Starling is it happens when it happens. They tend to under-promise and therefore over-deliver, which I think is the right thing to do.

Slow and steady etc.

[Anarchist (Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)]

To be fair, if you search for ‘Monzo travel card’ you are quite likely to get a lot of results about using a Monzo card abroad.

[anon75400416]

I agree my results are slightly biased

I guess all I was trying to show is that Monzo has at times embraced that position of being the go to moneycard. Whether it’s on purpose (as it’s area they can make money in through charges) or a mistake on their part they don’t seem to have rolled back from the position

[ravipatel (Ravi)]

I remember MSE strongly recommending Monzo as their top travel card and even having special codes to skip the (back then) queue.

So presumably this was a Monzo endorsed growth hack which eventually became inconvenient.

[RSheff]

@ravipatel

So presumably this was a Monzo endorsed growth hack which eventually became inconvenient.

Once you earn yourself a reputation for something, it’s hard to shake it off when circumstances change.

[ravipatel (Ravi)]

@RSheff

Once you earn yourself a reputation for something, it’s hard to shake it off when circumstances change.

Story of my life!

[misterm]

Monzo very much pushed the fee free withdrawals aspect - at one stage it seemed half the forum posts were on this. Starling and Virgin money very much downplay this.

I recall about a decade ago Nationwide made a thing of fee free withdrawals abroad, it didn’t last long as they had a lot of people having the account for just that reason.

[j06 (Jamie)]

Your business model should be ready to support it, though, if you’re going to offer it.

You shouldn’t have a model where something is definitely getting culled if it becomes too popular. That’s ridiculous.

[jzw95]

On the other hand, you need to adapt your business model as the business and your customers evolve. I wouldn’t expect any business to doggedly stick to the same model over many years, ignoring the reality of the market they’re operating in. It’s not like Monzo got rid of unlimited fee-free foreign cash withdrawals after a couple of months; they offered it for years. Banks in particular change their products as customer habits and financial markets shift.

Bringing this around to the thread topic, I would expect Starling to also adjust their products over time, including withdrawing ones that don’t make sense (or adding fees where necessary). If they don’t, they won’t survive. But Anne will be on top of that, she’s been a banker for years.

[danbeddows (Dan)]

I completely agree and what you’ve said is incredibly reasonable.

A great example of that is when Starling introduced fees for replacement cards abroad, which were once free. Even with a seasoned banking CEO, Starling initially chose to offer free card replacements.

Was that an oversight or switch and bait?

Probably neither, but Monzo would almost certainly be accused of one of those.

It’s more likely; as with the fees introduced by Monzo for overseas ATM withdrawals - exactly what Monzo said happened - more people used it than they expected, and it’s costing more than is sustainable or reasonable, and they need to adapt.

[ysconhb (Jenny Linson)]

@danbeddows

Starling introduced fees for replacement cards abroad

In reality they still haven’t. What they have done is introduced the possibility of charges if they decide, which is obviously a deterrent to those who may misuse it. They happily sent me a card abroad and didn’t even mention the possibility of a charge despite the T&Cs, as did Monzo, and all my banks actually. This was before Monzo introduced overseas delivery charges too though so I’m not sure if that would be true today, whether they also just ‘reserve the right to charge’ so to speak or if it’s something they always charge for.