Earlier this week, Crowdcube alum and challenger bank Monzo announced it was asking the Monzo Community to decide on ATM fee pricing. It was revealed:
“We launched the Monzo Alpha back in October 2015 to a few hundred people. At the time, we said ‘we’re committed to launching prototypes early and gathering feedback. We can then iterate and improve’ and that approach has proven to be incredibly useful. Thousands of people have sent feedback and given us their thoughts on the product we’re building, through in-app chat, social media and our community forum. Together, over the last two years, we’ve started to build the kind of bank that we’d be proud to call our own. Today, we’re coming to our community again to ask for your help with a tricky decision. As the Monzo user base grows and evolves, people are increasingly using their Monzo Mastercard Prepaid Debit cards abroad. Very high foreign transaction fees have always been one of the things we hated about our old banks, and we’re committed to keeping foreign spending free for our users.”
Monzo also shared that when a Monzo card is used to withdraw cash from an ATM outside of the UK, Monzo pays the ATM owner a substantial fee. That fee varies from around 1% in Europe to just over 2% outside of Europe. The company currently absorbs the ATM fees itself.
“We want to build a sustainable, viable business that is around for many years to come. At the moment, the rising costs of foreign ATM withdrawals makes that difficult. So, in the spirit of transparency, we’d like to share the numbers behind these costs and three proposed solutions.”
Monzo then stated that spending by card in a shop, hotel or restaurant (any “point of sale”) will remain free of charge. Online transactions in a foreign currency will also be free of charge – the company will pass on the Mastercard rate with no markup. ATM withdrawals in the UK will also continue to be free.
“We want to find a way to reduce this increasing cost burden in the fairest way possible, whilst still giving you a great deal compared to the options above. To that end, we have three suggested options to put to the community.”
The options are the following:
- 1% charge for ATM withdrawals in Europe, 2% charge for withdrawals Rest of World
- 1.5% charge for ATM withdrawals everywhere outside the UK
- £200 free allowance per month, 3% charge for withdrawals thereafter everywhere outside the UK
“This is a decision we want to make in conjunction with you, our community. We’ve created a dedicated poll and discussion topic on the community forum for this and we’d love your thoughts and feedback there. The poll is designed to be indicative — if there is a clear winner, we’ll choose that option, but if the results are all relatively close together, we may make a decision taking into account all of the discussion and feedback, as well as our long term vision for Monzo.”
Voting, which can be don here, will go on until Wednesday (September 20th).