MSE News: Monzo to curb free overseas ATM withdrawals

edited 14 September 2017 at 2:27PM in Overseas Holidays & Travel Planning
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Former_MSE_KarlFormer_MSE_Karl Former MSE
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App-based Monzo Bank has announced it is to scrap or severely limit free overseas ATM withdrawals on its popular prepaid card, and has launched an online poll asking users to vote on a number of different charging options...
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'Monzo to curb free overseas ATM withdrawals'
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  • Doc_NDoc_N Forumite
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    The words 'shooting' 'self' and 'foot' spring readily to mind. If the free ATM withdrawals overseas are withdrawn, is there any other reason to have an account with them?

    I'm guessing not. :)
  • LowermaxLowermax Forumite
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    Monzo is far more than a foreign spending card (like revolut and competitors), the fact it notifies you after spending is a big plus and if the "traditional" bank systems weren't so archaic they would all be doing this now.

    I've been using my card for the past 18 months for everyday spending and it enables me to keep a track of exactly what i spend.

    I've just been accepted for one of their current accounts and will be moving all direct debits/standing orders and finally my wage to it.

    Free overseas withdrawals was always going to end as it isn't sustainable for them but the rates they are proposing are still reasonable (far better than the big UK banks).

    I can't wait to see what Monzo do over the next few years, especially considering what they have done in such a short period of time!
  • bagand96bagand96 Forumite
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    The words 'shooting' 'self' and 'foot' spring readily to mind. If the free ATM withdrawals overseas are withdrawn, is there any other reason to have an account with them?

    I'm guessing not.

    The thing is... Monzo are not, and don't want to be, just a foreign spending card. They are launching current accounts, they want to be a fully featured bank. And they can make money off people doing day to day banking with them. Offeeing the fee free overseas spending was a great way to put their brand out there and get people to sign up.

    The problem comes when the masses sign up just to take advantage of the loss leader offer (in this case fee free overseas spending) but don't actually want to use your product full time. There's no money to be made... in fact there's probably lots to be lost.

    Next of I guess is Starling. I signed up for the same reason. I actually really like their product... and although I'm not yet convinced to use them for my sole banking needs, I do use their current account as just that, a current account with regular transactions. My fear is everyone jumps on bird for the fee free overseas spending... but doesn't use it otherwise... and they pull it.

    But that's the downside to the great resource that is MSE. Tesco Bank current accounts being a recent case in point....
  • RikMRikM Forumite
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    Doc_N wrote: »
    The words 'shooting' 'self' and 'foot' spring readily to mind. If the free ATM withdrawals overseas are withdrawn, is there any other reason to have an account with them?

    I'm guessing not. :)

    er, no fees on card use? Giving the mastercard exchange rate with no additions on foreign transactions...?
    Basically, the card is not actually intended for cash withdrawals, that's obvious from the conditions which place limits on ATM use (in general).
    This is just an attempt to stop bleeding cash to foreign fees - especially from people who are taking the card to only use it for holiday cash withdrawals.

    On that basis, hell yes, pass on the fees. It's still cheaper than what is levied on most cards, and using as a payment card (and not a cash card) is still going to be fee free...
  • eDickyeDicky Forumite
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    I've noticed what appears to be a compulsion to withdraw foreign cash for spending by users and potential users of these 'travel' cards, instead of just using the cards to pay whenever possible.

    Withdrawing cash without fees is an expense for the card issuer, whereas using the card for spending brings them revenue. So if they find that a high volume of ATM withdrawals is causing them more loss than they can safely absorb, of course the introduction of fees becomes necessary. Revolut already had to do this in order to survive and obtain further investment.

    I signed up to Monzo prepaid (then Mondo) in their early days before any mention was made of its use for travel. Not finding information anywhere about their overseas fees I asked via the in-app chat and was told that there were none at all, with the straight MasterCard exchange rate. I suggested this might be a popular aspect of their card and they should show this info on their website. They did so, and later Monzo was listed among the prepaid travel cards on MSE. I'm not trying to claim any credit, but point out that apparently they had initially hardly considered overseas use of the card and its effects on revenue. No doubt it brought them lots of customers, but at some point they have to try and balance the books.

    Even with an ATM fee for foreign withdrawals in excess of £200/month (which looks the most likely), Monzo will still be a useful card for travel. Personally I have no sympathy for those who only want to withdraw cash without fees instead of paying by card whenever possible. If Starling Bank and Loot are used (abused?) in this way, the same thing will happen.
    Evolution, not revolution
  • Neil49Neil49 Forumite
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    It is unfortunate that MSE have heavily promoted the Monzo card as the best card for foreign travel. Nearly every day or so I have seen posts where people have been applying for one a few days before travelling simply to withdraw cash from atm's abroad.

    Monzo have always had atm restrictions in the Terms and Conditions (£200 per day, £1,000 per month etc) for newer applicants but I don't know what controls they had in place to enforce these limits.

    Either way, there are a significant number of users who have just used it for that one purpose and it has become an unsustainable major overhead for a small startup like Monzo. I've had my card for 9 months now and in many travels abroad I've only used it once in an atm (when the Dubai metro card system went down and I had to get some cash).

    Those complaining about this change should consider the fact that you shouldn't rely on one card when travelling abroad. I also used a Clarity card (for atm use) and a Caxton card.

    I use my Monzo card every day in the UK as the app feature of instant notications means that I can spot any unauthorised use or cloning in an instant. It also means that I don't need to carry much cash on me.

    I just hope that other small startup banks offering similar benefits don't suffer in a similar way. Metro bank has had to change its stance but the fact that it is generally based around London and is branch based hs limited the number of account openings as you have to go into a branch to open one.

    I shall be sticking with Monzo because for me it has benefits here in the UK that the major banks have yet to provide.
  • A_TA_T Forumite
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    Looks like Starling will be the one to use abroad - at least until they introduce fees ;-)

    This was inevitable. Free foreign usage attracts customers but is expensive for the issuer.

    I only got a Monzo card for foreign use. Can't see the point of it otherwise and I doubt I'll use it once the fees are introduced.
  • Neil49Neil49 Forumite
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    If a large number of users switch to Starling for the very same reasons then Starling will find themselves in the same situation.

    The problem is that we all want something for nothing and life just isn't like that. You can't expect Monzo or Starling to cover the costs of atm usage abroad just because we don't like to pay for it ourselves.
  • A_TA_T Forumite
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    Neil49 wrote: »
    If a large number of users switch to Starling for the very same reasons then Starling will find themselves in the same situation.

    The problem is that we all want something for nothing and life just isn't like that. You can't expect Monzo or Starling to cover the costs of atm usage abroad just because we don't like to pay for it ourselves.

    Then why offer it at all in the first place? Because they want to attract customers. So when it's taken away customers will leave and noone should be in any doubt as to why.

    Monzo is doomed now.
  • edited 20 October 2017 at 5:03PM
    mikeeboymikeeboy Forumite
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    edited 20 October 2017 at 5:03PM
    Big shame.

    Not as attractive now for me.

    Just checked out Starling, seems to be like for like
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