Why choose to launch in the USA - a nation of credit card users?

I’m new here, but was interested to know why Monzo has chosen to launch in the USA before other potentially more European countries? Only around 1/3 of Americans prefer the debit card over credit cards (due to the generous cashback and protection incentives for credit cards). The debit card has severely fallen out of favour with users, particularly in the younger tech savvy demographic that Monzo is most likely to target. I’m just not sure what the advantages of using Monzo would be over using the new Apple Card, that offers many of the tech features of Monzo but also offers cashback. Sorry if this has already been answered :slight_smile:

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Can’t get your wages paid into the new Apple Card

Bank accounts have other uses apart from card spending


As to why not other European countries, that could be one or more of a number of factors including:

  1. Brexit “passporting” worries
  2. Multiple languages
  3. Different banking cultures
  4. More neo bank competition

Also still loads of people there!


Thanks for the replies! Completely understand Monzo is more than just a debit card. The research I saw showed a decline from 50% to 35% from 2013 to 2016 in terms of favouring debit cards. For younger people this was even lower at 25%. It seems that many of Monzo’s key features will be diluted or irrelevant to an American user who primarily uses their credit card, based on these trends.

35% of the total US population of 327.2 million is 114,520,000 people.

25% of the US population between 18 and 34 (68,712,000 people) is 17,178,000 people.

Still plenty of people for Monzo to aim to capture and just that 17-odd million is a bigger market than the entire populations of Malta, Cyprus, Estonia, Lithiania, Ireland and Denmark put together.


For widespread acceptance, you’ll need a couple of languages in the US…

Beyond the idea that a fraction of the US market is still a lot of people I think that the heavy CC use provides a really good platform to work towards the “Financial Marketplace” idea. If you can spend on your CC but have you wages paid into Monzo, see your transactions from all your cards in Monzo summary, pay your statement, buy your insurance etc etc then that might be the USP to grab some of the 66%


What an odd choice of countries to choose for a comparison…


Ireland was added as that is were Monzo had planned to extend in Europe first. All the rest are just European Union countries that add up less that 17 million.


I reckon they will scrape by okay for now in English only

Perhaps it’s also because Monzo doesn’t think it can compete with N26 who are already dominant in most of the eurozone countries.

N26 must have a more compelling offering in the EU then, as they are still bumping along in the UK after getting on a year

I did have competition from N26, Revolut and the like (and soon to be Starling) in mind, but the stated reason is regulatory uncertainty

I really don’t think it’s about competition with any one player. That seems to be more a fixation of the forum than the company in my experience. It’s not like N26 have the only customers in the Eurozone.


The US itself has a completely different banking culture to the UK.

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I agree. I think they’re going for salaries, bills and marketplace rather than card use.

It has one different culture, not twenty odd

Bigger market for one adjustment

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Oh I see - yes that’s true. I thought you were implying it was more similar to UK

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Generous cashback, or other similar incentives, is possible on debit cards also due to a much higher interchange fee in the US compared to here in the UK/EU, where it has a very low cap.

So I’m not convinced that high credit card usage in the US is solely down to this, or to protection incentives.

I suspect it’s just due to a borrowing culture in general, and the fact that the credit card companies have maybe moved a little faster on tech compared to banks.

The growth and the culture more recently in the US has been with P2P Fintech apps with better UX. Things like Venmo, Cash App, etc. This is obviously a space where we also do well.


Old thread, but:

Generous cashback, or other similar incentives, is possible on debit cards also due to a much higher interchange fee in the US compared to here in the UK/EU, where it has a very low cap.

I will say that this varies by bank. The interchange fees are higher in the US but are limited for banks of a certain size (according to Wikipedia the maximum possible interchange fee for a debit card 21 cents + 5 basis points if the issuing bank has over $10 billion in assets).

However, for the most part, banks that big seem to think that’s not enough for them so they’ve pulled rewards from debit cards. Basically, from brick-and-mortar banks here I’ve only seen debit card rewards programs from smaller banks, and online there are only a couple as well (Discover Bank apparently being the biggest that does).

There’s an opportunity there, for sure. What I’d consider a good dip in the waters would be to offer a premium feature with the benefits of a travel credit card, and see how many takers there are. If you could spend on your bank account and debit card and get all the benefits of a credit card (shopping protection, after-the-fact price matching, rewards, travel delay/baggage insurance, etc) but without the credit line, would you possibly be able to change the trend?

Although there is one protection incentive that’s a biggie. Fraud protection- when it’s a credit card, it’s not your money at stake while the matter is being resolved. If it’s a debit card, your money can be drained straight away and how soon you can get an account credit to cover you while the matter is being investigated is at the discretion of the bank. I hope Monzo would be one of the better ones in this respect.

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