8.6 C
New York
Saturday, July 13, 2024
Home Challanger banks Monzo introducing new fees for services

Monzo introducing new fees for services

For some customers, Monzo bank cash withdrawals and card replacement will be met with new charges from 31 October 2020 as Monzo introduced new rules.

The customers who withdraw more than £250 over a 30-day period in the UK or European Economic Area (EEA) will be charged a fee of 3%. Those who withdraw more than £200 elsewhere in the world over 30 days are already charged 3% (except those who have Monzo Plus, who have a higher £400 limit before they’re charged.)

Read also: PayPal enters the installment market with a new BNPL product

Monzo has also introduced a £5 fee for card replacements in the UK unless the card is stolen, expires or the customer is a victim of fraud.

Monzo claims that the new rule considers only about 1/5 of its customers. It says that the average Monzo customer only withdraws £36 a month, and 90% have never ordered a replacement card.

“This doesn’t necessarily mean we’re your only bank, but it does mean you’re likely to use Monzo enough to depend on us for some of your core banking needs,” Monzo said in a message to customers.

Why the change in the rules? Monzo bank losses jumped from £47.2m to £113.8m amid a hiring spree, marketing, and US expansion in 2019. The bank is seeking for ways to make itself profitable as it also reintroduced its premium account Monzo Plus this summer.

Although Monzo is a licensed bank, the company’s 4million customers kept just £357 in their account last year on average. The bank is concerned that customers use it as a spending account rather than the main bank account.

Therefore if customers do use it as their main bank account, customers will get two free card replacements before they have to pay. To do so, the customer has to meet at least one of the bank’s requirements. See the requirements below:

  1. Paying at least £500 in total into a Monzo account every 35 days, with at least one active Direct Debit on the same account in the same period.
  2. Getting a Department for Work and Pensions or Department for Communities’ payment (things like Universal Credit or a state pension) in the last 35 days.
  3. Getting your student loan paid into a Monzo account every 8 months. 
  4. Sharing a Monzo Joint Account with someone who does one of the above. 
Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

Recent posts

NEW Revolut UK CEO to make Conference Debut at MoneyLIVE Summit

MoneyLIVE has today announced that Revolut’s newly appointed UK CEO will be making her conference debut at MoneyLIVE Summit 2024, which is...

2024’s Financial Innovators: A New Era of Banking Startups 

In the wake of the COVID-19 pandemic, our world witnessed an unprecedented shift towards digitalization. The banking industry, in particular, has been...

C-suite Banking and Payments Leaders From Across Europe Set to Meet at London’s MoneyLIVE Summit in March

On the 6-7 March 2024 MoneyLIVE Summit will return to London’s QEII Centre to unite over 1000 banking and payments leaders from...

The Evolution of Digital Wallets: A Shift from Physical Cards by 2030

By 2030, we can expect digital wallets to become the preferred payment instrument, offering a myriad of non-payment-related services for consumers.