What would make Monzo the perfect banking experience?

Understood. It just sounded a little “tin foil hat” when I first read it.

You’d rather companies openly charged for extras than hiding the costs elsewhere and provided them ‘free.’

Got it now.


I’m not, so it doesn’t change my point.

Some of the best things don’t let you pay for them (and don’t make money from you surreptitiously either). Whilst the competition you have to pay for charge you for a lesser service. petdatabase.com comes to mind here.

1 Like

A database of pet microchip numbers with their owner’s addresses can be run almost for free. A bank cannot. Apples and oranges.

1 Like

But I think the point is that they need to make money somewhere, be it from grants or charitable contributions (two other options).

That said, @duncang is (imo) quite right in using the basic heuristic for VC funded firms: either you pay for the product or are product (or both).

I had a very quick look but couldn’t see how they are funded. (Or what their data policy is for that matter). Any ideas?

1 Like

Yup, that’s the line :smile:. I know people always want free stuff, and the internet has only encouraged them. But unless you want to uproot consumer capitalism it’s a fantasy, and we should I think all be a bit more mature than “I want all the stuff for free”, when we know for a fact that it just won’t work like that.


They’re funded by pet companies (largely their own parent, tailster) who pay them to promote their brand on user account perks pages (think Monzo plus’s offers). You can opt out of this though, so you won’t see or receive those offers.

They also sell QR pet tags that when scanned will show your contact details stored with pet database.

1 Like

We hold our money in banks because it is easier than holding it under the mattress.
Banks hold our money so they can play with it, and hopefully make a profit. They keep the profit born of my money.

Ergo - I am paying for the bank account.

With regards to Chase - they are making money each time I use my debit card - they’re simply giving 1% of that back to me. I am incentivised to use the Chase debit card because of this.

With Revolut - they no longer provide the virtual card for free, so I no longer use the account. I find there customer service to be worse than Monzo’s. I don’t think it worth paying for.

My wife and I have a Nationwide joint account that we pay for because it has the most compelling insurance provision - and for a time, interest rate.

Money… doesn’t really work like this. If you want to know more you can see the Bank of England explain it here.

I don’t think this follows. It would only be true if you had an alternative to having a bank account which made you money. While it’s possible, in theory, to do this by using cash and an interest bearing savings account, it’s not really practical.

My reasoning is that I lend the bank my money, and in return, instead of paying interest, they offer me a service.

1 Like

Interesting link - but the link is concerned with how money is created (created through loans etc) and the limits on this (the monetary policy of the central bank)…

…but that is in addition/seperate to what a bank does with our deposits. They still play with our money to try and make a profit… else why would they want to hold our money?

I thought I basically said this? - I give the bank my money because it’s easier than keeping it under the mattress… they play with it and hopefully make a profit.

I receive no interest from Monzo…

Can you define “play with” a bit better?

Broadly - They lend your money to people/businesses etc and earn money by charging interest on the loan. Some banks also gamble it on the stock market.

Banks also create money through the creation of loans (subject to central bank policy) and charge interest on those loans.

A bank typically has less money available for withdrawals than the total amount of money deposited with it. Should its customers withdraw all their money in cash at the same time (a run) the whole thing breaks.

Except, they don’t. As per that Bank of England report:

One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them.

They do… in addition to creating money through loans (subject to rules set by the central bank).

Else why would they hold your money - such infrastructure costs money to run. It has to be paid for…

Granted - a bank doesn’t necessarily need your money to create a loan. To create a new loan the bank just needs to create an equivalent liability.

When a bank lends £1000 to a customer, it creates a new loan asset for £1000 and a new deposit for £1000.

1 Like

Customer acquisition for their loans business?
So that customers have somewhere to transfer the funds to in order to use them?
Various fees on the accounts?
To upsell a veriety of other products through?

Banks can fund their lending via wholesale markets, money markets, etc. They absolutely don’t need nor do they lend out your deposits.

1 Like

If the bank doesn’t need you money - and is not underwriting loans with your money - why is a run on the bank a bad thing?

Free plushies with every account opened


Monzo switching offer confirmed. @maxwhite


Someone needs to tell the Bank of England this.

Many banks today offer free safekeeping services, with no charge for using your current account. In return, they are able to use the money stored with them to earn a profit, by lending it to other people.