Turning off debit card top-ups for new users

Yes you are, that wouldn’t have made sense because a few other things have changed now that the current accounts have launched :wink:

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You might not have activated mobile banking.

I thought this might be the case so I was showing how your “ludicrous” suggestion didn’t even make logical sense.

Moron they might be, but maybe they care more about the ease than the cash.

No I’m not.

I checked my emails; here’s an excerpt from my invitation to upgrade;

If you’re thinking “I really like my card as it is”, don’t fear. You can upgrade and then continue to use your Monzo account in exactly the same way.

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But, oh look, here’s that promise from December 2017.

And it addresses top–ups from the start. And there’s me in post #3 saying what I still believe today. And there’s you @Anarchist in post #4 explaining what upgrading means.

And there’s @Naji in post #5 stating in black and white:

(Emphasis mine)

I would say you remembered correctly.

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That’s a little bit more specific :slight_smile: I think Tom’s addressed that comment with his point about ‘bait & switch’.

Although, directly under the part of @Naji’s quote you chose, he says:

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No problem, not 100% sure myself. All I know is, companies are not allowed to charge for card transactions including Apple Pay/google pay

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Yes. Bad selective quoting (unintentional).

Like I said, I think top–ups are foolish, but Monzo did make a great deal out of the “use your new current account in exactly the same way” line.

Maybe Monzo selectively quoted the ‘exactly’ promise and omitted “but only until we change it in less than a year” :wink:

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That’s a good point, Monzo are set up as a merchant in order to accept these payments (no source :stuck_out_tongue:) so I expect that rule applies to them too.

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I don’t think you can win either way if you charge or don’t for top ups. I think it’s been good turned off for new members.

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I agree that I don’t think Monzo can win here – there’s always going to be someone unhappy.

If I’m honest, I completely see that Monzo promised using the account in exactly the same way, but I also think it’s unrealistic to think a product or service would never change – at what point is it acceptable for Monzo to change policy on this? Or do they have to stomach the cost forever?

While I sympathise with that view, people need to remember the issue is being raised RE Monzo’s sustainability, and so that ultimately we can all continue to enjoy their (superior) service for free. I don’t think they’ve set out maliciously to catch people who upgraded from pre-paid to current account, and then gradually remove features that customers previously enjoyed – they’re doing it because it costs them a fortune and they can’t swallow it forever. When competitors get to Monzo’s size I wouldn’t be surprised if you also saw them scaling back such costs.

The other point to make, that I don’t think has been made before, is that if they could save that money being spent by a smaller proportion of users, and spend it elsewhere for all users (like myself who gets my salary paid in – hence no top-ups) – maybe that’s gradually increasing Foreign exchange ATM withdrawal allowances, or charging cheaper interest on overdrafts (Tom mentioned recently that the FCA might have issue with the current 50p/day, and it’s been well discussed that on an APR basis Monzo aren’t as competitive with people like Starling). I know Monzo don’t want to segregate users (premium accounts etc.) – but they’re already doing it a little bit here…

As I say, I think ultimately someone will always be unhappy, but in this case I think there seems to be a small proportion of those 150k users who actually need to use top-ups (people in foreign countries for example who can’t do faster payments on weekends).

Either add a 0.5% fee to cover it, or if it’s not possible to charge for the top-up – remove the feature all together. Those users affected will quickly adapt. For reference, I use Nationwide and First Direct – both have finger print recognition for quick access, and after setting up Monzo as a payee the first time around, it literally takes ten seconds or less to wire money into my Monzo account instantly (all faster payements). Suspect most people affected will be like me – based in UK with another account that works on faster payment network - therefore – not the end of the world.

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I’m wondering how the legislation is phrased. If it’s about exchanging money for product/services then there might be an argument that Monzo is exempt as the card transaction isn’t for a purchase per se (and didn’t someone say that Transferwise charge?)

Might dig it out and have a look later #geek

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Right. This is slightly complicated. And (in my view) doesn’t really help.

This originally comes from an EU Regulation, but takes effect in UK law through a modification to the Consumer Rights (Payment Surcharges) Regulations 2012.

This is what the legislation says:

“Fees any payee must not charge any payer
6A.—(1) A payee must not charge a payer any fee in respect of payment by means of—
(a)a payment instrument which—
(i)is a card-based payment instrument as defined in Article 2(20) of Regulation (EU) 2015/751 of the European Parliament and of the Council of 29th April 2015 on interchange fees for card-based payment transactions(2); and
(ii)is not a commercial card as defined in Article 2(6) of that Regulation; or
(b)a payment instrument which—
(i)is not a card-based payment instrument as defined in Article 2(20) of that Regulation; and
(ii)would not fall within the definition of commercial card at Article 2(6) of that Regulation if, in that definition, the reference to any card-based payment instrument were to any payment instrument and the reference to such cards were to such payment instruments; or
c) a payment service to which Regulation (EU) 260/2012 of the European Parliament and of the Council of 14th March 2012 establishing technical and business requirements for credit transfers and direct debits in euro(3) applies.
(2) A payee receiving a payment by means of a payment instrument must not charge the payer, in respect of such payment, a fee which exceeds the costs borne by the payee for the use of that specific payment instrument.

Reference: The Payment Services Regulations 2017

The Explanatory Memorandum explains what the Government was trying to achieve:

PSDII introduces a ban on retailers’ ability to charge for the use of payment instruments, where their interchange fees are capped under the Interchange Fee Regulation, which includes the majority of consumer debit and credit cards. The Regulations go further by extending the ban on surcharging to all non-commercial retail payment instruments. This is intended to level the playing field across all non- commercial retail payment instruments and create a clearer picture for consumers in which they know the full price of the product/service they are purchasing upfront and are confident that there will be no additional charges when they come to pay using a particular payment instrument.

Reference: http://www.legislation.gov.uk/uksi/2017/752/pdfs/uksiem_20170752_en.pdf

I’m not a lawyer, but I think it’s unclear and would need to be tested in court whether Monzo could apply a fee for topping up. The legislation says that a “payee must not charge a payer any fee” - I think there might be an argument to say that Monzo is neither the payer or the payee as both of them would be the same person (the card holder and account holder), meaning that Monzo would not be bound by the legislation. Moreover, the explanatory memorandum (not part of the law, but I understand are sometimes referred to by the courts if there is lack of clarity around intent of the legislation) talks about retailers and purchasing - again neither of these words really apply here…

tl;dr - my view: probably legally arguable either way but would likely need to be tested in court. But would Monzo want to take the risk?

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Yup, it’s clear as mud.

I found this earlier, in some guidance. Bottom paragraph is quite noteworthy (imo)

image

Interesting - but isn’t that related to the previous legislation (where retailers could charge cost for card payments?) Got a link to the original?

I’ll look at it again tomorrow when I’m not a few beers in :wink:

Here’s the link: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/718812/payment-surcharges-guidance-update.pdf - says 2012, but it was updated in June 2018

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Since there seems to be a reluctance to charge for card topups, how about providing a positive incentive for using Monzo without card topups. Perhaps a lottery of some sort?

All Monzo users could get entered into a monthly prize draw (perhaps you could re-purpose the now defunct golden tickets for this) but lose their entry in any month in which they do a card topup. The prize could be relatively small from your perspective but large enough to incentive individual users to change their behaviour - perhaps £500 to £1000 per month prize.

Whilst the above has a very simple set of rules, a problem is it would potentially reward inactive accounts. So perhaps you also put some barriers on gaining the ticket in the first place. Perhaps users need to have x number of transactions in a given month to gain a ticket. Perhaps users who also have their salary paid directly into Monzo get an extra ticket.

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Why isn’t it possible to setup a direct debit to pull money into your account, rather than using a standing order to push it over from your external bank?
They’re both pre-configured faster payment bank transfers aren’t they? Only a DD is initiated from the receiving side - which is what people seem to like most about card topups?

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I don’t think that direct debits are instant. They take two or three days, so aren’t really a direct replacement in that sense.

Good idea, though!

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Because you need to be a member of the Direct Debit Guarantee Scheme

Extract:

Provided you meet the required criteria, which involve checks for integrity, financial standing and administrative capability, you will be accepted onto the Scheme.

Your bank will advise you on the facilities you may need in terms of accessing the service and provide you with the Scheme Rules and procedural information necessary before you can offer Direct Debit to your customers

From here

http://www.bacs.co.uk/Services/bacsschemes/gettingstarted/Pages/DirectDebit.aspx

Open Banking may offer a way to do this in the future, though.

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