Hey all. I wanted to chip in some thoughts here. I’m not on the Plus team as I have enough to do with Open Banking but I do have some opinions on what I’d pay for myself.
We are both, and they aren’t mutually exclusive. In fact, I think Monzo relates much more closely in the way it operates to product companies like Deliveroo, Tinder, Skyscanner, Stripe, Spotify etc. We are backed by venture capital.
Why is this, exactly? What makes Monzo different to other software you use? Given that Monzo don’t make money in many of the ways a traditional bank does (with extortionate fees), I wouldn’t instinctively expect people to hold strong views like this. So if you could elaborate a little bit on this, it might help me to understand!
I don’t think we’d ever take essential features in the app and put them behind a paywall - we want our features to reach as many people as possible. I’d imagine that our core product will always be orders of magnitude better than any other bank out there. This is why I don’t agree with the idea that non-paying customers would be getting a “second tier” banking experience. In my head I imagine that the paid features will be designed for a specific group of customers who want more than a typical customer does out of their banking app.
Equally I don’t think this is true. There can be many reasons why we add features to the app, for example to encourage growth (e.g. Shared Tabs, bill splitting, golden tickets), encourage people to deposit their salary (e.g. get paid early, salary sorter), or to become a financial hub (e.g. Flux, external credit cards). In my view it would make almost no sense to make many of these features “paid for” features and this will remain true of lots of features we introduce in the future.
We can (and do) do both. In the future I would hope that Open Banking and Marketplace provide significant revenue opportunities, but for now the whole Open Banking/marketplace concept is still in its infancy and it’s going to take a lot of time until our efforts would start to pay off.
A good analogy here would be Elon Musk and SpaceX. Elon’s goal is to go to Mars, but he realised that he needed to make SpaceX financially viable entity if he’s ever going to achieve the ultimate vision. Mars could one day be very profitable for SpaceX. But the technology is just too immature at the moment. For that reason, they are looking at ways they can be very impactful in the short term and make a profit while doing it. Their interim solution is good for their customers (who pay orders of magnitude less to launch satellites now) and it’s good for them too.
Again, I don’t think these two things are mutually exclusive. We can continue to improve our core banking functionality and work on value-added features at the same time. In fact, I would argue that would be the most sensible approach.
Other banks make some of their revenue from lending, but for Monzo, it’s less than you’re implying. A huge part of other banks’ revenue comes from extortionate and unfair fees and charges. Monzo doesn’t do that. In my view it is far, far better to ask customers to pay for an additional optional feature they’re going to get true value from than to sneakily charge them when they least expect it.
I am sure the Plus team will provide this clarity as soon as they have evaluated all the options.
I think it’s fine that some people don’t want to pay for optional extra features. I might not myself. Some people will look at them and think “I just don’t need that”. That’s OK.
Ultimately, if we all want Monzo to reach its potential, then it has to become financially self-sustaining. This means making revenue. This is why it’s so important that we can try things out and that we all keep an open mind about it. Sometimes it won’t work and we’ll be very clear about that, and try again until we find something that does work. If we build something that nobody is willing to pay for, then clearly that would be a failure. There is a strong incentive for us to get it right and to make customers happy with the result.
By allowing ourselves to charge money for new features, we open up a whole new world of possible things to build that we previously couldn’t because they were too expensive to make or maintain. So I’m personally quite excited about what we could see arriving in the Monzo app in the future.
