Monzo are a bank, full authorised and unrestricted.
Started back in Feb 2015, their goal was to build the best current account in the world, achieved not only through internet and banking wizardry, but also through open and transparent communications with its customers, the same customers who voluntarily helped fund Monzo in the first place (via The fastest crowdfunding campaign ever ).
As per their website, Monzo is a bank ‘with everyone, for everyone’, and is more than happy to work with its ever expanding community of users who are free to suggest additional features, or report any bugs/issues. It’s a team effort!
At present I guess you could call Monzo a Beta, but that’s not to say its limited, quite the opposite, as they current offer a positive (in my eyes) bank solution, and have some serious plans for the future.
So in short the current Beta offers a prepaid Mastercard and is what I will be talking about in this post. This card and its associated app offer …
- Help with budgeting
- Real time transaction data
- Zero fees
- Contactless payment
Once everything is in place however, the following can also be expected.
- Current accounts
- Direct debits
- FSCS protection
The Monzo Prepaid Mastercard
So as above, this is a Beta, but still an awesome one in my opinion.
In short the Monzo is a prepaid Mastercard, so you basically crack on as you usually would in terms of contactless spending, chip and pin spending or withdrawing cash from ATMs.
Apart from your having to remember a new pin, very little else is required in order for you to pay for new experiences, food, drinks, reading materials etc.
I love this app, mainly because I’m a numbers kinda guy and like to see that all my finances are in order, but also because I know the app is secure within my phone and also because the app allows me to top up easily and also freeze my card if needs be.
As per the below screen shots you can see examples of itemised spending, along with details of spend location and exchange rates. The app also allows you to attached receipts, categorise your spending, split bills and make instant transfers with other Monzo cardholders.
It’s all very clever and is present very clearly so that you finances become much easier to understand.
So being a prepaid card, topping up is required but it’s easy as pie.
There are two possible ways you can top up funds onto your card. One is almost instantaneous, the other takes a bit longer, but both are actioned via the app (below).
With the debit card transfer, all you need is an internet connection to top up £100 at a time. It’s really easy.
Where to start with this one!? Well the benefits are tenfold, allow me to give you a little rundown …
- Zero withdrawal fees!!
- Better exchange rates than high street exchange bureaus and your regular card
- Secure app (finger scanner can be enabled – as below).
- Usage notifications … and failed pin attempts/withdrawls (as below).
- Ability to top up your funds via your phone, all you need is a wifi connection.
- Ability to Freeze your card yourself, rather than have to ring a customer service agent to do it, should you be unfortunate enough to lose your card of have it stolen.
- Itemised spending.
- Spend reports available to download via the app (as below).
- Ability to add reciepts.
- Ability to split bills.
- It’s a MasterCard! … accepted most places.
- Contactless payment.
… oh yeah, and it’s FREE!
A quick note on my use of the word ‘saving’ in this post. Use of the Monzo card will not gain you cashback, or somehow allow you to build up some kind nest egg. My use of ‘saving’ in this post refers to your spending less per transaction based on a better exchange rate offered by Monzo, and their zero withdrawal fees.
The zero withdrawals fees is massive, that used to be a perk of my Nationwide debit card and saved me a small fortune on my gap year. Since Nationwide reintroduced withdrawal fees I’ve found myself taking out larger sums of cash to avoid them, but then as a consequence end up carrying around more cash than is probably recommended.
Combine the above with improved exchange rates versus your high street debit card or credit card, and this is where Monzo shines as a route to save you money, and here’s my evidence as promised earlier in this article.
So that’s the full detail above, but let me breakdown and summarise the savings via Monzo.
- £793.34 – this is how much my better half and I actually spent, using both my Monzo and Tesco Credit card to pay for different things.
- £805.01 – this is the figure I have calculated as a total cost, had I used my Tesco credit card for the entire trip (using the average rate of the purchases made with that card pre trip).
- £731.89 – this is the figure I have calculated as a total cost, had I used my Monzo card for the entire trip (using the average rate of the purchases made with that card during the trip).
- £73.12 – this is the savings value/difference I have calculated, between using the Tesco credit card for the entire trip vs the Monzo card.
So the above calculations have been worked using average values and on the premise that I paid for the entire trip on the same card, as a result the £73.12 figure is not 100% accurate. I used an average because it was easier and simplified this example, but you get the point right? – the Monzo card offers better exchange rates than my Tesco credit card. I also worked the 2 scenarios whereby the entire trip was paid for using each card so to better highlight their difference in values.
In reality I used a combination of the two cards and so made a more modest saving of around £10 (approx). But this is no doubt due to paying for the more expensive items on the Tesco card.
Now £10, or even £36 might not sound life changing, but remember that this was over just 4 days, in an expensive country. Imagine if you were interailing around Europe for a month, or even travelling to Australia or New Zealand for a year. I haven’t personally tested it, but I dare say having and using a Monzo card would save you a lot of money versus using your regular card.
What in turn could that saving mean? … Another week on the road? Another month? The additional funds to splash out private room instead of a dorm?
All I’m saying is that this card looks legit, perfect for travellers. I’m so glad my buddy introduced me to it, and hopefully I’ve now perked your interest, not because I’m here to promote Monzo for affiliate reasons, or because I’m being paid to write this (I’m not), but because I see it as a route for travellers like me to stay on the road longer, or enjoy a greater experience in new (or old) destination. Even if that greater experience is achieved through being able to afford just one more ice cream.
Maybe you don’t want to take my word for it just yet, until you’ve seen further proof/evidence, but just know that even Buzzfeed (via 19 Surprising Ways To Save A Little Money) are on the case about this card and heaping praise on it. Certified!
Now that Monzo opperate current accounts, the below no longer apply :)
I can only think of two, which are minor if you take the view that your Monzo card is a travel top up card, and not a regular bank.
The money you have topped up will not acrue interest while in your Monzo account. Interest is obviously something you will be used to and come to expect from a bank, but with the Monzo and travelling, I doubt you’d have too much money in your account at any one time anyway, so personally I am taking the view that this is a minor drawback, but it does depend entirely upon how you handle your own accounts.
You cannot transfer funds back out to your regular bank account
Have you topped up too much? Sadly you cannot simple move money back into your regular account. You’d need to visit an ATM and withdraw the money as cash and then deposit that sum with your regular bank. It’s a bit of a pain, but is unlikely to happen on too many occasions. I should also add that I’ve seen requests on the Monzo message boards for this functionality to be added, so this is a possibility that this function could be added in time.
Getting your own Monzo card
Getting hold of your Monzo MasterCard in the first place used to be the most difficult bit.
When I signed up there were some 11,000 in the queue ahead of me, and more recently when my better half signed up she found 13,000 people in the queue ahead of her. Long lines!
However, by spreading the word and recommending Monzo to friends there was a system whereby you can be bumped up the waiting list. There were also Golden Tickets which Monzo issued to existing users, who in turn could pass on to a friend in the queue. By doing this said friend jumped directly to the front of the line and got their Monzo card within the next few days.
Now however Monzo are fully up and running, no longer just a pre paid card, they’re now fully fledged current accounts. Gets your now and claim a free £10 using the link below. Go go go!