Monzo has made changes to ATM and replacement card fees, passing the costs back to customers.

From 31 October, the digital challenger bank is introducing a three per cent fee for withdrawals of more than £250 cash in 30 days in the UK and European Economic Area, while a £5 fee is coming in for card replacements in the UK - except if a customer is the victim of fraud, the card is stolen, or if it expires.

Jack Cully, product marketing manager at Monzo, explained in a blog that based on how people used Monzo in the last year, 79 per cent of users will not be affected. "The average Monzo customer only withdraws £36 a month, 90 per cent of people have never ordered a replacement card, and 99 per cent have never ordered more than two."

The new charges appear to be part of Monzo's attempt to reduce costs as it seeks to turn a profit.

While the bank has gained more than 4.4 million new current account holders since its launch in 2015, its most recent financial reports in July showed a £113.8 million loss last year - up from £42.7 million the previous year - with warnings about the ability to continue as a going concern.

Further explaining the changes, Monzo stated that it has worked hard to ensure these changes are fair and do not affect Monzo Plus users, vulnerable customers, or those currently paying student loans, receiving Department of Work and Pensions payments, or paying £500 plus one direct debit in the last 35 days.

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