Tom makes a good point about people being emotional about money, and Monzo’s flat per–day fee being more tangible than a % rate, but the model does mean that larger overdrafts don’t bring more money in.
Having said that, there’s an argument I made earlier which maybe implies that with smaller overdrafts, there’s a lower percentage of bad lending (where it’s just not paid back) and therefore a greater percentage of Monzo’s lending overall is profitable.