LONDON–Monzo, which quickly grew to more than four-million users and is one of the so-called “challenger banks” credit unions are frequently cautioned to watch, is now borrowing a page from the very banks it has taken on by adding fees.
Monzo, formed in 2015 as a digital financial services provider and then granted a banking charter in the U.K. in 2017, has seen its valuation fall by some 40% this year. In response, Monzo has looked to cut costs and also announced new fees for less active users, approximately one in five of its more than four million customers.
The new changes, according to Monzo, only affect a small minority of users. Particularly those who use it “more as a spending account than a bank,” the organization said.
According to Monzo, effective Oct. 31, some of its customers will have a fee-free ATM allowance of £250 every 30 days in the U.K. and European Economic Area, with a 3% fee after. Allowances outside the EEA aren’t changing for anyone, staying at £200 every 30 days, with a 3% fee after.
Fee for Replacement Cards
In addition, Monzo said it will also start charging for replacement cards. Some users will get two free cards and after that pay a £5 fee. Other customers will always pay £5 in the U.K., and won’t get two free ones.
Those getting bigger allowances will do so because Monzo deems them to be using it more as a bank than a spending account, reported Altfi.com.
“This doesn’t necessarily mean we’re your only bank, but it does mean you’re likely to use Monzo enough to depend on us for some of your core banking needs,” Monzo said in a message to customers.