The basic version: transaction processing networks cost money to operate, because they require quite a bit of dedicated infrastructure (need to be secure, need to be verifiable, need to be reliable, need to be rapid) and mostly acheive this with proprietary entry and exit systems (e.g. EMV readers). Processing networks like Visa, Mastercard etc fund the costs of their networks by charging per-transaction fees. Blockchain networks replace a centralised infrastructure with a decentralised one, which dramatically lowers the per-transaction fees required, with the requirements of security, verifiability and reliability ensured by cryptographic design (rapidity is still an issue for full transaction verification, but risk decreases rapidly over time even prior to addition to the ledger). They also use existing transport networks (i.e. the internet) to provide entry and exit points on top of commodity hardware. On top of the efficiency gains, some cost for operating the nodes is born directly by the node operators in exchange for the proof-of-work payouts. Blockchain networks arenāt perfect (e.g. no authority with the ability to āforceā transaction reversal in the event of theft or fraud), but itās a good bet that they will be used in the backend of whatever the successor to EMV is.
Hello Edward, and thank you for such an in-depth response. I appreciate your time on this topic, because itās very interesting. The topics you bring up may have their own implications. Although I agree with your assessment of the cost for centralized and proprietary infrastructure, I fail to see how that cost could be lowered with the de-centralized approach, since each node would have to maintain even more connection points in order to process the transaction. Such transactions would still have to remain secure and reliable, but there will also be a side-effect of unnecessary and unwanted transparency and information leakage for the private transactions (why should Node A know the source and destination of funds between two private counter parties). I am positive that the technology can offer additional solutions for anonymity for clearing, but once again, it feels like a solution upon solution for a problem we donāt really have. Instead, the institutions should look to lower the infrastructure costs through the use of virtual and private clouds, where the basic network communication and storage (if needed) is rapidly approaching zero, commoditizing on elastic and region-free computing. Thoughts?
So is feedback on this topic only being taken and responded to at the Monzo events? I was under the impression they would use the forum to engage with the community on the topic. It seems a very limited number of users (both in number and diversity) who are having input, if itās only at the Monzo office events that this discussion is taking place.
Iāve flagged this for the team & Iām sure theyāll respond soon.
In the meantime, when Iāve asked about this, theyāve explained that theyāre testing the water at these events, to see whether the proposal can be tweaked & improved before itās presented to the whole community for discussion.
The events discussion is just to get it started and be transparent 
Weāll be doing it properly with all customers next week or the week after!
Hopefully (I assume) at an open office that is live streamed?
Great! I shouldnāt have doubted. 
Personally the main reason of my joining in was free-withdrawls anywhere . Now that I am on Monzo I love it for much more than just that, however I do think that at least in part free withdrawls anywhere should be maintained.
I have withdrawn abroad, not massively but it has happened, mainly because my mom needed cash and her account had been frozen by her bank.
I think there should be an annual, not monthly, allowance for free withdrawls. I think annual would be best as some of us save up on their holiday so would need all their allowance in a short period of time rather than spread monthly.
After that maybe there could be an opt-in āsubscriptionā of Ā£x to allow free atm withdrawal for the upcoming week/month etc.
If people choose not to opt in and still withdraw cash then their withdrawl will be subject to whatever fee Monzo had to pay for that atm transactionw
Personally Iād be fine with X free withdrawals per month/year and anything past that would be charged extra, that way you wonāt get stuck without cash (like you would with a hard limit) while still remaining fair for Monzo and the other users so that someone abusing the feature will have to pay for it themselves after the few free withdrawals.
Itās probably worth bearing in mind that Monzo is never going to replace your entire financial life, and there are other places to get a good deal on foreign withdrawals.
I was thinking about replacing my Halifax Clarity credit card (which gives me the same rates on foreign currency transactions that Monzo does), but Iām hanging on to it for now until Monzo decides which direction they want to go with this.
there are other places to get a good deal on foreign withdrawals
Is that really the case though? Most foreign withdrawal deals (or in fact any deals) from the legacy banks rely on ripping you off on something else (extreme overdraft fees or direct debit rejection fees for example). Iām confident whatever Monzo comes up with will be a better deal than the legacy banks.
Monzo certainly will be cheaper than Revolut who screw their customers with extra cost if they dare to use their card on a weekend
See thatās where I donāt agree, I WANT Monzo to be able to replace my entire financial life. Otherwise there is no point. If I need to still carry around a bunch of different cards and remember which does what then Monzo has no interest.
I am currently in the account preview and at 95% I use Monzo.
The rest 5% are websites where I forgot to change the card or direct debit that I need to manually set up.
I donāt want to have to use different financial products. I want Monzo to be my financial products for Ā£ (meaning I hold different accounts in different countries).
But Monzo are not going to do mortgages, credit cards, personal loans, insurance, etc (at least for the foreseeable future) so you wonāt be able to have all your financial stuff with the one provider. They will instead offer a Marketplace where you can get financial products from approved 3rd parties
Yes, thatās correct but itās still centralised. I will have access to all of that through Monzo, unless I am mistaken it should be a pretty seamless process.
And currently given my financial situation I would be able to use Monzo as my sole financial product. With maybe the exception of a credit card but to be fair I might just keep my french one.
I get the same rates with my credit card that I do with Monzo, provided I remember to pay it off. Iāve never paid interest on a credit card in the 12 or so years Iāve had one.
I agree that they are ripping someone off though.
Iām not saying itās not possible to get good rates with legacy banks, you just have to play by their rules. However I donāt support their ārulesā to begin with so I would love to see Monzo offer a more fair alternative thatās not relying on scamming to be profitable.
I donāt think Iād ever trust a single business with my entire financial life to be honest. But even if I wanted to Monzo are not planning on offering savings accounts, credit cards, mortgages or loans.
Even providing access through the marketplace as they envision, my finances will still be spread around multiple banks and Monzo will never be able to pipe absolutely everything through their marketplace.
Well my finances are split by currencies, so yes I guess Monzo is not and wonāt be my sole financial product.
However, I would like Monzo and its marketplace to the the financial product I use for GBP.
Iāve changed my mind on this a bit actually, as someone who has and will use their card abroad outside of the EU for cash withdrawals (admittedly not hugely often) ā I initially thought allowing a certain amount of āfree withdrawlsā per customer, or recognising more loyal customers who use their card more than just for holidays, would be the way forward (mainly because it would benefit people like me ļ). But I suspect thatās very hard for Monzo to implement, without looking like theyāre singling individual user groups out.
So, for me it boils down to, āif youāre doing it, and itās costing us, and weāre not footing the billā ā then whatever it is thatās costing money ā should just be directly passed on to that customer. That is super transparent, super simple, nobody can argue with it, and itās really easy to understand. I also said that there is probably a point to be made about educating users, so that theyāre aware of the costs, and can try to mitigate them in these situs (like paying on card instead of withdrawing cash).
I donāt know enough about it, but Iād imagine even with Monzo passing on the full ATM fee, it would still be cheaper than a current bank by the time they factor in spreads, commissions and fees? Maybe someone from Monzo could comment on this, but (assuming Monzo is still cheaper) I think that kind of comparison would really help Monzo when explaining whichever strategy they end up going for. āItās going to cost you Ā£X to do Y, but thatās still cheaper than Barclays, HSBC etc who charge A, B and C for the same thingā.