Monzo asks users to vote on foreign ATM fees
Written by Chris Lemmon
Monzo has asked its customers to vote on how the challenger bank should charge customers for ATM withdrawals abroad, at the same time as announcing the decision to axe its free foreign money service.
Monzo said that it is currently absorbing the high foreign transaction fees itself – costs which have more than doubled in the past year. In June 2016, ATM withdrawals cost Monzo around £6 per active user per year, but by the end of August 2017, ATM withdrawal costs per customer had more than doubled to nearly £16 per year.
The bank attributed this to people using their Monzo card more frequently, increased awareness of the free cash withdrawals offered and people signing up specifically to use the debit card abroad.
Just 13 per cent of customers account for more than 85 per cent of total ATM costs in any given month, according to the bank. It stated that many people have signed up to Monzo because of the favourable exchange rates and fee-free ATM withdrawals abroad, but do not keep using the card once they are back in the UK.
As a result, Monzo will be changing its policy and has suggested three options for its community to vote on:
1 – A one per cent charge for ATM withdrawals in Europe and a two per cent charge for withdrawals in the rest of the world
2 – A 1.5 per cent charge for ATM withdrawals everywhere outside the UK
3 – A £200 free allowance per month, then a three per cent charge for withdrawals thereafter everywhere outside the UK.
It will still be free for Monzo customers to use the debit card to make a purchase abroad at a merchant’s point of sale.
The bank said in a blog: “Each of the options is cheaper than the major banks we tried. With these options, it may be possible to find specific cards that offer cheaper withdrawals abroad (like Revolut, Starling and WeSwap) – our aim is not to always be the absolute cheapest on the market if it means we can’t build a sustainable business, but instead to find a fair way to pay this cost as part of the overall Monzo experience.
“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.”