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I believe their plan revolves around lending money and then charging interest on that (like typical banks). They already support overdrafts[1] on their app. [

I believe their plan revolves around lending money and then charging interest on that (like typical banks). They already support overdrafts[1] on their app. [1]: https://monzo.com/features/overdrafts/ https://monzo.com/features/overdrafts/

benj111 7y ago
Right, but every other bank offers overdrafts and still don't make much money from current accounts. Additionally new regulations are coming in (in the UK) banning you from charging a daily overdraft charge [1], torpedoing it's one source of income, which doesn't jive with it's doubling in value in less than a year. [1] https://www.bbc.co.uk/news/business-48553193 https://www.bbc.co.uk/news/business-48553193
- shawabawa3 7y ago
  That bans fixed fees - (e.g. you get charged £1 a day when in overdraft) Monzo has never had fixed overdraft fees, and can still charge a daily % interest rate as usual Overdraft fees are also not their "one source of income"
  - benj111 7y ago
    Read the GPs link "A 50p charge every day your account is overdrawn by more than £20, up to a maximum charge of £15.50 a month. No other fees, that’s it". That sounds like a 50p a day fixed fee to me. They can still charge a percentage, but that 50p per day (£15.50/ month)is £186pa on a potentially only £20 overdraft, I don't think they would get away with the equivalent APR. In the context of the conversation, one current source of income was offered, so I think its reasonable at that point to label it their one source of income, other sources have been mentioned elsewhere on the thread though.
    - shawabawa3 7y ago
      oh, my bad, I didn't realise Monzo used a fixed fee. I'm glad they have to change that, that's payday-loan level APR for small overdraft balances I was thinking of Starling's overdraft (similar UK bank) which is 15% APR with no fixed fee
  - DanBC 7y ago
    Here's the link to the FCA press release: https://www.fca.org.uk/news/press-releases/fca-confirms-biggest-shake-up-overdraft-market https://www.fca.org.uk/news/press-releases/fca-confirms-bigg... > Stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts. > Banning fixed fees for borrowing through an overdraft – calling an end to fixed daily or monthly charges, and fees for having an overdraft facility. > Requiring banks and building societies to price overdrafts by a simple annual interest rate.

benj111 7y ago

Right, but every other bank offers overdrafts and still don't make much money from current accounts. Additionally new regulations are coming in (in the UK) banning you from charging a daily overdraft charge [1], torpedoing it's one source of income, which doesn't jive with it's doubling in value in less than a year. [1] https://www.bbc.co.uk/news/business-48553193 https://www.bbc.co.uk/news/business-48553193

shawabawa3 7y ago
That bans fixed fees - (e.g. you get charged £1 a day when in overdraft) Monzo has never had fixed overdraft fees, and can still charge a daily % interest rate as usual Overdraft fees are also not their "one source of income"
- benj111 7y ago
  Read the GPs link "A 50p charge every day your account is overdrawn by more than £20, up to a maximum charge of £15.50 a month. No other fees, that’s it". That sounds like a 50p a day fixed fee to me. They can still charge a percentage, but that 50p per day (£15.50/ month)is £186pa on a potentially only £20 overdraft, I don't think they would get away with the equivalent APR. In the context of the conversation, one current source of income was offered, so I think its reasonable at that point to label it their one source of income, other sources have been mentioned elsewhere on the thread though.
  - shawabawa3 7y ago
    oh, my bad, I didn't realise Monzo used a fixed fee. I'm glad they have to change that, that's payday-loan level APR for small overdraft balances I was thinking of Starling's overdraft (similar UK bank) which is 15% APR with no fixed fee
- DanBC 7y ago
  Here's the link to the FCA press release: https://www.fca.org.uk/news/press-releases/fca-confirms-biggest-shake-up-overdraft-market https://www.fca.org.uk/news/press-releases/fca-confirms-bigg... > Stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts. > Banning fixed fees for borrowing through an overdraft – calling an end to fixed daily or monthly charges, and fees for having an overdraft facility. > Requiring banks and building societies to price overdrafts by a simple annual interest rate.