“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.
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.
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?
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.
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?
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!
1 Like
Anarchist
(Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)
253
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
Is there no way of doing something clever with GoCardless? I can’t remember exactly how it worked, but I’m guessing @anon91821566 does! Not that I use topups, but would it help those who do?
As for the use case of people living abroad, I don’t think it’s for Monzo to subsidise the inferior banking systems of other countries (yet!).
Finally, I personally think Monzo.me is one of the best things about Monzo, and use it all the time with friends. I dont think you even can use it on yourself (unless you go through a fiddly chain of accounts?), but it is genius to be able to send a text to a WhatsApp group and receive the amount from everyone. Hopefully when Monzo gets to the point of being able to invest our deposits, it will be able to subsidise things like this.
Post Office savings work this way: when you sign up you provide details of a “linked” bank account, which you can pull money from when you want to deposit. It’s done via Direct Debit (and as mentioned below, not instant).
The problem with direct debits is that it puts unacceptable risk on Monzo. They’re not real-time, meaning that there could be 2 days (at best, could be longer on weekends) in between Monzo submitting the direct debit request and getting a response of whether it succeeded or declined, and in the meantime Monzo already gave you money you can spend right away. There’s also the direct debit guarantee where anyone can dispute a payment and get an immediate refund no questions asked (not the same as a card payment dispute where a legitimate reason must be provided and will be verified by the card networks).
Direct debits work for some businesses where the losses due to non-payment are minimal (utility bills, etc - on a 30£ declined phone bill, your carrier only looses around a fiver so no big deal), but for a bank it’s suicide.
Just for info and worth considering, I do this and only do it because cash can’t yet be paid into a Monzo account.
I know it’s being worked on, but I will remain cautiously optimistic about what the solution turns out to be.
To be specific; I have a prepaid Mastercard that allows top up by PayPoint. The key feature of this is that for a reasonable fee that I don’t mind paying the money goes straight onto the card. This then allows me to put my cash wages from my second job into my Monzo account without having to travel on a Saturday morning to an open branch of a bank.
I would have no objections if Monzo were to implement the same kind of feature, I wouldn’t complain at a small charge for a cash top up facility by PayPoint ONLY BECAUSE it’s instantaneous. The card I have has free methods of top up but none of them are instant. I’m not prepared to wait for several days for the money to land.
As for transfers from other bank accounts, I don’t know how it is in London these days but even in cities like Manchester, bank branches are being stripped at a ridiculous rate. And bank opening hours mean I can only really go to one on a Saturday morning before it closes. That’s no doubt the case for a lot of people that don’t work in city centre locations and work office hours (and beyond in my case.)
I can’t see myself even having secondary cards if Monzo pull the goods out for cash pay ins. I imagine barely anyone would ever want to do a card top up again perhaps? Has their been any attempt at looking at the reasons why people do card top ups?
I replied to the original post so I won’t repeat the whole thing here but some of us have second jobs that pay cash. Second bank accounts are useless for the hours I work and lack of availability of branches pretty much means I get a once a week window to get to one. I’m hoping that the cash pay in solution that they’re currently working on will mean I won’t need to do card top ups anymore (I use a prepaid card that allows instantaneous top up via paypoint and then I can use that to top up my Monzo account.) This is on top of my salary being paid in directly. So there are going to be people that can’t “adapt” unless Monzo provide better solutions to the gaps in their product.
Anarchist
(Press ‘Help’ search ‘Contact us’ or email help@monzo.com or call 0800 802 1281)
259
I don’t know if this is any use to you, and you’ve probably considered it, but some bank branch ATMs allow you to deposit cash (notes) at any time of day.
Doesn’t have to clear immediately I’d guess - cheques don’t, and if everyone now blocked from using cards started using the freepost address to pay in by cheque, it’d cost way more than 50p/£100 - even when you can eventually do it by photo
I find that it’s based on some fraud metric. Eg somewhere I regularly transfer goes through fine if similar value. If sudden big jump then it’ll ask for the 2 factor. Larger transactions may require a few occasions with the 2 factor before going through to the same recipient with similar amounts without it.
Im glad its not affecting existing users as I spend 9 months out of the UK. You have a kot of my cash with earning interest. Monzos simplicity and ease is the reason why I hold a substantial amount with you.
Any indication that Curve is increasing topups? I can link a credit card with cashback to a debit card that then tops up my current account with a cash balance, what’s not to like! Making £1.25 a day for the pleasure of easy money.
