Monzo Plus, Premium, and Negative Interest Rates

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Monzo Plus and Open Banking (from Monzo Press)

My use-case of Monzo is a daily spending card to ring fence “fun money”. Its budgeting tools are good enough for simple uses like mine, and the design is aesthetically pleasing.

I signed up to its recent offering — Monzo Plus — because I thought I would make use of the virtual cards, the ability to view my other accounts in Monzo, and the custom categories.

That, mostly, didn’t turn out to be the case.

The virtual cards’ design and integration into the app was quite clunky, and there was no way to easily pull up the card numbers. It was a nice idea, but clearly in its infancy.

The ability to view my other accounts in Monzo was great, the data flowed in when I needed it and my Barclays accounts felt at home right next to my pots.

I didn’t use the custom categories at all. Monzo’s pre-created ones were actually fine for my needs.

Monzo Plus as a whole didn’t feel properly integrated into the overall experience. It felt very much like disparate projects tacked onto the main Monzo experience — plugin instead a first class citizen — and thus not very choesieve. The virtual cards are a prime example of this.

After the three month period, I decided to cancel Monzo Plus as it didn’t provide enough value for money at £5 per month. The card was nice, and the ability to view my other accounts in Monzo was the only thing I thought was actually useful.

In itself, the plus — pardon the pun — points don’t add up to enough to be worth the price of the Plus subscription.

When Monzo announced Monzo Premium, I realised just how little I was getting for £5 per month. For an additional £10 per month, Monzo Premium gets you a competitive family travel and personal gadget insurance. If you want to, you can also get a beautiful Metal Card (with contactless support) and view your American Express in your Monzo app.

For those who already have a Monzo account and already pay for travel and gadget insurance, this could be a good deal — with a metal card thrown in.

I wish Monzo Premium without the metal card was priced around £10 per month; that would be a sweet spot for most people.

I’m sticking with the regular, free, Monzo account. They convinced me to try a paid offering in the second iteration of Plus and I wasn't impressed on the whole with the offering. Monzo Premium looks more tempting, but its headline features (which, at least for me, are the insurance packages) can be found cheaper elsewhere.

If Monzo can find a game changing feature that is specific to their platform, then they may convince me and others to sign up. Maybe that game changing feature is the metal card, who knows?

Personally, however, I’m afraid it’s a case of “much better, but still not competitive enough”.

The Bank of England recently asked banks if they were operationally ready for negative interest rates. This has made me ponder if this is the beginning of the end for free bank accounts. Negative interest rates hurt smaller banks more than bigger ones, so — whether they like it or not — these smaller competitors will have to get used to asking their customers to pay for more and more services.

For those consumers lucky enough to be able to afford to pay for their bank accounts, shopping around for the best package offer might become a more and more necessary skill.

Perhaps Monzo Plus and Premium are pre-empting the future norm of bank accounts in Britain. I certainly hope not.

I love computers, design, and people.

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