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.
Currently Monzo's prepaid card allows free overseas spending and ATM withdrawals worldwide, though withdrawals – abroad and in the UK – are restricted to £250/day, £1,000/month and £3,000/year.
The challenger bank, which was launched in 2015 and has 400,000 users, has previously hinted that overseas ATM withdrawal fees may be in the pipeline. But this is the first time we've had confirmation it plans to make changes, and this is likely to be before the end of the year.
Monzo says overseas spending, online transactions in a foreign currency and ATM withdrawals in the UK will all remain fee-free. For full help on keeping costs down when spending abroad, see our 18 cheapest ways to get travel money.
What is Monzo planning?
Monzo, which acquired its full banking licence in April, published a blog this afternoon entitled 'ATM fees abroad: Asking the Monzo community to decide pricing'.
The post asks for input in what the bank calls a "tricky decision", with users asked to choose between three options for possible future overseas ATM withdrawal charges. These are:
- Option 1: 1% charge for ATM withdrawals in Europe, 2% charge for withdrawals in the rest of the world
- Option 2: 1.5% charge for ATM withdrawals everywhere outside the UK
- Option 3: £200 free allowance per month, 3% charge for withdrawals thereafter everywhere outside the UK
Users have until Wednesday 20 September to vote and are also invited to submit alternative options, although a Monzo spokesperson confirmed to MSE that it will definitely introduce some form of charges for overseas ATM withdrawals. As of 5pm today there had been just over 1,200 votes and option 3 was in the lead, with 63% of votes.
Monzo says the poll is designed to be "indicative" but that "if there is a clear winner, we'll choose that option".
It says it hopes to make a decision "as soon as possible" after the vote closes and adds: "We will of course communicate this to everyone who voted and all of our customers – the actual fees won't come into effect until two months after that, as per our terms and conditions, and will apply on both the prepaid card and the current account."
What other options are there for fee-free ATM withdrawals overseas?
The Barclaycard Platinum travel credit card has no fees on overseas spending or cash withdrawals worldwide until August 2022. For those happy to open a bank account, Starling Bank has a similar offering with no set end date.
Why is Monzo making the changes?
Monzo insists the proposed changes are "not profit-making" and blames "'very high foreign transaction fees" imposed by ATM owners for the impending restrictions. In its blog, the bank said it's typically charged fees of between 1% and 2% which it currently absorbs.