Monzo asks its customers to decide on the fee rates for ATM withdrawals to cover growing costs

13 September 2017

MonzoMonzo, a UK-based digital mobile only bank, started the poll aimed to help it decide on the fee rate to be charged for ATM withdrawals, as the company suffers sizable losses related to free withdrawals made by its customers. The bank noted that the withdrawals cost it too much but acting in line with its policy of customer friendly service provision Monzo decided to ask its customers which option they prefer.

Now customers may vote on the option how to charge them for ATM withdrawals on the official company website, as Monzo reported that free ATM withdrawals made in other countries increased in cost from over £6 per active customer in June 2016 to around £16 per active cardholder in August 2017.

However, the growth in costs is mainly driven by a relatively insignificant number of cardholders who apparently subscribed for the service with a specific aim to use Monzo cards while travelling abroad. Thus, only 13% of the customers make up over 85% of total ATM costs in every month.

In the poll customers should decide whether they prefer to have a fixed 1.5% fee on every withdrawal, or have a £200 free allowance after exceeding of which cardholders will have to pay 3% per transaction. Monzo explained that the new fee scheme is not designed to make profit for the company, it will just cover the costs. If customers fail to choose one of the schemes, Monzo will make a decision itself. While ATM withdrawals will be charged, overseas POS transactions will remain free.

This July Monzo reported £7.9 million in losses resulting from its rapidly growing popularity, and announced that it plans to bring its customers from prepaid card service responsible for major part of its losses, to a current account.

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