How we got customers to sign up to Monzo in the early years
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How we got customers to sign up to Monzo in the early years
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Re: How we got customers to sign up to Monzo in the early years
#2How do they make money?
Re: How we got customers to sign up to Monzo in the early years
#3How do they make money?
[deleted]
Re: How we got customers to sign up to Monzo in the early years
#4How do they make money?
- Interchange fees (Monzo take ~1% of every card transaction)
- Packaged account fees (Monzo Plus, Premium and business Pro)
- Lending (Overdrafts, Personal Loans, Credit Card)
- Interest on bank deposits
Re: How we got customers to sign up to Monzo in the early years
#5How do they make money?
The short answer is that they don't really. UK retail banking is notoriously low margin, and all of the major banks struggle to make anything from their consumer businesses. Charging for bank accounts is not something the UK market accepts.
They'll likely cover costs in the long term, and their business banking will probably do fine, but I suspect the valuations aren't justified. The main way that the major players make money is through things like mortgages, wealth management for the very wealthy, and through their investment banking arms.
Starling is another startup bank, a main competitor to Monzo. While they're decidedly less "cool", they seem to have targeted business banking much more, and I suspect that's why they're now in a better position. Monzo went big on Monzo Plus and even on its ~3rd? iteration, it seems to have had a lacklustre reception. I'm Monzo user #13, about as onboard with the idea as I could be, and I find it unconvincing.
Monzo have just launched Monzo Flex, an easy payment system like AfterPay/ClearPay/Klarna. I'd normally expect that to do well but it's about 2 years too late and going into a recession is probably not the right time. Hopefully it'll do well as we come out.
Re: How we got customers to sign up to Monzo in the early years
#6Good old Monzo times.
Sadly, in my opinion the company took on too much investment and was now bound to deliver tech-company returns with a product that fundamentally isn't compatible with them. This led them to become yet another bullshit "growth & engagement" operation and ultimately killed the appeal of the product, all while competitors such as Starling Bank stepped up their game and delivered a very similar product that is not only profitable but doesn't have those "growth & engagement" vibes because they didn't have the same pressure and could afford to take things slow.
Re: How we got customers to sign up to Monzo in the early years
#7How do they make money?
The short answer is that they don't really. UK retail banking is notoriously low margin, and all of the major banks struggle to make anything from their consumer businesses. Charging for bank accounts is not something the UK market accepts. They'll likely cover costs in the long term, and their business banking will probably do fine, but I suspect the valuations aren't justified. The main way that the major players m…
Starling makes money from business accounts (they pocket the interest on those, and that interest amounts to more considering business accounts keep a larger balance) and I believe also provides services to other payment companies, essentially SaaS-ing their tech.
It's a shame because this is something that Monzo could've done just as well and there's absolutely a place (well, was - that's now taken by Starling) in the market for it. Natwest still charges extra for a "next-gen" business account that allows multi-user access to a web UI, and I bet it's terrible - this is something a company can Monzo could've built in days based on their existing modern tech at a time where there was nothing like it in the market.
Re: How we got customers to sign up to Monzo in the early years
#8Earlier quoted context omitted.
The short answer is that they don't really. UK retail banking is notoriously low margin, and all of the major banks struggle to make anything from their consumer businesses. Charging for bank accounts is not something the UK market accepts. They'll likely cover costs in the long term, and their business banking will probably do fine, but I suspect the valuations aren't justified. The main way that the major players m…
Starling makes money from business accounts (they pocket the interest on those, and that interest amounts to more considering business accounts keep a larger balance) and I believe also provides services to other payment companies, essentially SaaS-ing their tech. It's a shame because this is something that Monzo could've done just as well and there's absolutely a place (well, was - that's now taken by Starling) in t…
Monzo do have good tech, but I've also heard that there is a "surprising amount of legacy tech" there as well. I'd interpret that as either they do too many re-writes of things, and/or they're perhaps not building at the level of quality that they should have been. They have some excellent engineers in the early team, but I've also seen a lot of very inexperienced people go there, so that in combination with a "move fast" mentality, will likely result in a lot of codebase issues and churn.
Starling seem to have taken a "slow and steady wins the race" sort of approach, and had a bunch of experienced engineers build a boring old Java app. Nothing special but I'm not surprised that it is working out ok in the long run.
Re: How we got customers to sign up to Monzo in the early years
#9Earlier quoted context omitted.
The short answer is that they don't really. UK retail banking is notoriously low margin, and all of the major banks struggle to make anything from their consumer businesses. Charging for bank accounts is not something the UK market accepts. They'll likely cover costs in the long term, and their business banking will probably do fine, but I suspect the valuations aren't justified. The main way that the major players m…
Starling makes money from business accounts (they pocket the interest on those, and that interest amounts to more considering business accounts keep a larger balance) and I believe also provides services to other payment companies, essentially SaaS-ing their tech. It's a shame because this is something that Monzo could've done just as well and there's absolutely a place (well, was - that's now taken by Starling) in t…
Monzo does have business accounts... I have one. It's great.
Re: How we got customers to sign up to Monzo in the early years
#10Earlier quoted context omitted.
Starling makes money from business accounts (they pocket the interest on those, and that interest amounts to more considering business accounts keep a larger balance) and I believe also provides services to other payment companies, essentially SaaS-ing their tech. It's a shame because this is something that Monzo could've done just as well and there's absolutely a place (well, was - that's now taken by Starling) in t…
Monzo does have business accounts... I have one. It's great.
They have them now, long after Starling ate their lunch - my point was that they could've offered them before Starling and probably made a killing (it would've been the only option for a modern business bank account in the market back in those days).