Jump to content

Monzo

From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by Sorayaeditor (talk | contribs) at 14:50, 22 February 2023 (Added reference to programmes Monzo is a part of.). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

For other uses, see Monzo (disambiguation).

Monzo Bank Ltd
Monzo
IndustryFinancial services
Founded2015; 9 years ago (2015)
FounderGary Dolman
Jason Bates
Jonas Huckestein
Paul Rippon
Tom Blomfield Edit this on Wikidata
HeadquartersLondon, England, UK
Key people
Gary Hoffman, (Chairman)
TS Anil (CEO)
ProductsBanking
RevenueIncrease £154.2M[1] (2022)
Decrease -£119.0M[1] (2022)
Number of employees
Increase 1,879[1] (2022)
Websitewww.monzo.com

Monzo Bank Ltd (/ˈmɒnzoʊ/) is an online bank based in the United Kingdom.[2] Monzo was one of the earliest of a number of new app-based challenger banks in the UK.[3]

Originally operating through a mobile app and a prepaid debit card, in April 2017 its UK banking licence restrictions were lifted, enabling it to offer a full current account.[4] As of July 2022, Monzo had over 5.8 million customers.[1] Their most recent financial results issued in July 2022, showed an annual net loss of £119M (an increase from the £116.2M lost in the previous year) on revenue of £154.2M.[1]

History

Monzo Bank was founded as Mondo in 2015 by Tom Blomfield,[5][6][7][8] Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman.[9] The team originally met whilst working at Starling Bank. In February 2016, Monzo set the record for "quickest crowd-funding campaign in history" when it raised £1m in 96 seconds via the Crowdcube investment platform.[10][11][12]

Two weeks prior to the name change, Monzo was granted a restricted banking licence, by the Prudential Regulation Authority and the Financial Conduct Authority and in April 2017 these restrictions were lifted.[13][14] Monzo had a number of prepaid debit cards in operation which it issued to users for testing purposes.[15] These cards were in use until current accounts were made available to all and the prepaid programme was closed on 4 April 2018.[16]

On 16 May 2017, Monzo announced that over £250 million had been spent through its prepaid card, between 200,000 customers.[17]

Monzo initially traded as Mondo. On 13 June 2016, a company blog post announced that the "Mondo" trademark had been legally challenged by an undisclosed company with a similar name.[18][19] As a result, a naming suggestion contest was organised and the new name, "Monzo", was registered at Companies House under the legal name "Monzo Bank Ltd" in August 2016.[20]

On 17 July 2017, Monzo announced the current account preview and began inviting eligible customers to sign-up for a preview of the full current account.[21][22] Initially, customers attended events at the company's offices in London but cards were also sent out via post. In line with the company's general stance on transparency, the Monzo website included a live counter showing progress on the rollout.[23]

In September 2017, Monzo joined London & Partners' Mayor's International Business Programme.[24]

In October 2017, Monzo announced that it would be discontinuing free ATM withdrawals abroad, replacing them with a free monthly withdrawal of up to £200 and a charge of 3% on subsequent withdrawals. This change came into effect on 18 December 2017.[25]

On 7 June 2018 Monzo announced an integration with IFTTT which allowed users to connect their account to smart devices and services. For example, connecting Monzo to Amazon Alexa.[26]

On 25 June 2018, Monzo announced their team up with TransferWise to provide international money transfers from within their Monzo app.[27] Existing TransferWise customer can connect their account to use along Monzo app. It was later announced in November 2018 that interest would be paid on savings (in 'Savings Pots' above £1,000) in collaboration with Investec.[28]

In October 2018, Monzo reached one million customers, and was also named the best tech startup to work for by LinkedIn UK.[29][30]

On 21 November 2018, Monzo added the functionality for users to pay cash into their Monzo accounts using PayPoint, charging users £1 for each deposit.[31]

On 28 January 2019, Monzo announced a partnership with Flux to add itemised receipts and loyalty points.[32] In addition to this, the API to create receipts was published by Monzo.[33]

In August 2019, the company announced that it had inadvertently logged 480,000 customer personal identification numbers, making them accessible to Monzo's internal team of engineers. The issue arose because PINs were transmitted in the query string of a HTTPS request.[34][35] That month the company also launched its loan products for customers.[36]

In March 2020, Monzo announced the creation of two business bank accounts for sole traders and small to medium sized businesses.[37] In May, Blomfield announced that he was moving from CEO to president of the company and TS Anil would become the company's CEO.[38]

In July 2020, Monzo launched its new premium subscription service, Monzo Plus.[39] Within the first month, the premium account had gained over 50,000 active users.[40]

In October 2020, Monzo launched its new top tier subscription service, Monzo Premium.[41]

In February 2021, Monzo announced Carol Nelson as the new US CEO, taking over from TS Anil who became Monzo's global CEO after temporarily holding both titles.[42]

In September 2021, Monzo launched Flex, a buy-now-pay-later product.[43] Later in the year, they announced a virtual credit card that can be used to make Flex transactions directly.[44]

In October 2021, Monzo announced that it had withdrawn its application for a US banking licence.[45] Carol Nelson stepped down as US CEO following the annoucement.[46]

Monzo US exited beta and was fully launched on 1 February 2022.[47]

Fundraising

In October 2016, Monzo announced an 'interim' funding round valuing the company at £50M and raised £4.8M in the process led by Passion Capital.[48] This round was followed by a second £2.5 million Crowdcube crowd-funding campaign with the total pledged quickly hitting the target amount.[49]

In February 2017, Monzo raised £19.5M from Thrive Capital, Passion Capital, and Orange Digital Ventures, which it intended to supplement with a crowdfunding campaign for an additional £2.5 million.[50]

On 6 November 2017, Monzo raised £71 million from several investors in a round led by Goodwater Capital. At the close of the round, Monzo was valued at £280 million.[51]

On 30 October 2018, Monzo became a pound “unicorn,” with an £85 million fundraising round valuing the company at £1 billion.

On 5 December 2018, Monzo held another £20 million Crowdcube crowdfunding campaign, reaching nearly £18 million in funding in less than three hours, and reaching the £20 million goal in just over two days.[52]

On 24 June 2019, Monzo raised £113 million in a Series F funding round led by Y Combinator's Continuity fund. This round gave Monzo a valuation of £2 billion.[53][54]

Their valuation fell 40% in 2020, raising a £60M down round in June, valuing the firm at £1.24B.[55] In December 2020, Monzo closed another £60M funding. Among the investors were some well known firms such as for Novator, Kaiser, TED Global.[56][57]

In December 2021, Monzo closed a $600m funding round at a valuation of $4.5bn.[58]

U.S. expansion

Monzo announced on 13 June 2019 that it would begin offering services in the United States, though it provided no timetable for an actual launch. During its announcement to expand, the company said that it would distribute about 2,000 debit cards to prospective members who attended events held by the company in major U.S. cities like Los Angeles, San Francisco and New York City. Along with retrieval of the debit cards, attendees were expected to offer the company feedback on their products and services.[59]

The company faces a more onerous regulatory environment in the US than in the UK. Financial technology is nationally regulated in the UK, and British regulators have a reputation of being friendly to such companies. By contrast, technology regulation in the financial sector is handled at state level in the US, with one consultant telling CNN that "US regulators are not that savvy as far as financial services are concerned. They've either been oblivious on regulation, or incredibly strict."[60]

Monzo will enter the US market through a partnership with Ohio-based Sutton Bank, and will retain many of its features, like instant spending notifications and contactless pay. Unlike in the UK, the company reportedly didn't intend to offer a money lending service to its US customers.[61] The company faces a highly competitive and heavily fragmented landscape in the US, with players ranging from tech companies such as PayPal and SoFi to a multitude of traditional banks that are heavily investing in digital platforms.[62]

Issued cards

The original design for the hot coral-coloured current account cards.

Monzo initially issued (with partner company Wirecard[63]) a variety of alpha, beta and investor cards to its customers who wanted to be early adopters.[64] These were prepaid Mastercards which the user could top-up via bank transfer or via an existing debit card.[65] The balance on the card could then be spent via contactless, chip and pin, magnetic stripe or online. From early on, Monzo has issued cards in a neon "hot coral" colour - initially intended as a temporary measure during prototyping[66] - but later, a deliberate decision arising from the success of the "eye-catching" design.[67]

In December 2017, Monzo issued new Debit Mastercard cards to all its existing and new customers as the bank began rolling out current accounts. Customers signing up for the current account are issued a Debit Mastercard.[68]

In October 2020, Monzo issued UK's first World Elite Debit Mastercard to Monzo Premium customers, Monzo said the card is made from a single 16g sheet of steel, weighs 3x more than a traditional plastic card, complete with a precision-engraved logo and a white finish. All Monzo Premium metal cards are manufactured in New Jersey, USA.[69]

Mobile apps

File:Monzo Android.png
A screenshot of the Android app, showing recent transactions.

Monzo has released mobile apps for both iOS and Android phones.[70] Payments made with the Monzo cards will trigger push notifications in real-time to phones running the apps, where historical transactions can also be viewed.[63] Users can categorise their transactions, freeze the card (if lost), mark company expenses and view an overview of their spending habits.[71]

Where available, the apps will show a map depicting the location at which the transaction took place, along with the company's logo.[72] Transactions will be auto-categorised based on the company involved in the payment, with data accuracy improved via crowd-sourced suggestions.[73]

On 29 September 2016, Monzo made the Android app publicly available for anyone in the UK to use.[74] This was preceded by a private beta in October 2015 with consumers who visited the office in-person to collect a card.[75]

Developer tools

Banks in the UK currently offer customers limited or no programmatic access to their financial data.[76] Whilst the UK Government is looking into legislation to require existing banks to comply with and adopt standards for secure and open APIs,[77] Monzo has already released a prototype API based on the OAuth standard within a year of the company's founding.

The company has also hosted four hackathons[78] and previously maintained a "Monzo Developers" Slack channel for developer discussion and support. The API allows developers to view transactions and accounts, receive notifications for events via webhooks and create their own items to appear in the app.[79] The responses are encoded using JSON which allows for data access in any programming language with JSON support.[79][80]

Fraud detection

During June 2018, Monzo gained significant public interest after fraud analysts with the bank spotted signs of and publicly announced a Ticketmaster data breach in April 2018, before Ticketmaster had spotted the breach themselves, and two months before Ticketmaster admitted the breach had occurred.[81][82]

In 2019 the BBC's Watchdog programme investigated Monzo after receiving complaints from Monzo customers who had their accounts frozen or closed.[83] Affected customers complained about the length of time they were unable to access their money.[84] In a response to this investigation, the company said that account closures take place if the bank "suspect[s] there's financial crime".[85]

References

  1. ^ a b c d e "Annual Report 2022 | Monzo" (PDF). monzo.com. Retrieved 19 July 2022.
  2. ^ "The UK's new breed of digital challenger banks". Techworld. Archived from the original on 9 April 2016. Retrieved 10 April 2016.
  3. ^ Kobie, Nicole (30 October 2019). "A new-wave of challenger banks is taking on Monzo and Starling". Wired UK. ISSN 1357-0978. Retrieved 8 November 2020.
  4. ^ "Welcome to Monzo Bank!". Monzo.
  5. ^ Burn-Callander, Rebecca. "Banking industry primed for a pocket-sized revolution". The Telegraph.
  6. ^ Baker, Stephanie. "A Bank for People Who Hate Banks". Bloomberg.
  7. ^ Carey, Scott. "The UK's new breed of digital challenger banks: Atom, Mondo, Starling and Tandem - Ranked". Techworld. Archived from the original on 9 April 2016. Retrieved 10 April 2016.
  8. ^ Treanor, Jill. "Digital banking: Mondo hopes to become the Google or Facebook of the sector". The Guardian.
  9. ^ "GoCardless Founder Tom Blomfield's New Startup Is A "Full Stack" Mobile-First Bank". TechCrunch.
  10. ^ Dawson, Freddie. "App Bank Mondo Crowdfunds £1M In 96 Seconds". Forbes.
  11. ^ Williams-Grut, Oscar. "App-only bank Mondo is valued at £30 million in an oversubscribed £6 million fundraise". Business Insider.
  12. ^ Turvill, William. "Mobile challenger bank Mondo reaches £1m crowdfunding target in 96 seconds, adding to £7m venture capital investment". City AM.
  13. ^ "When do you launch?". Focus FS Ltd. Archived from the original on 7 August 2016.
  14. ^ "Monzo, a UK digital-only challenger bank, granted full banking license". TechCrunch.
  15. ^ O'Hear, Steve. "Mondo, the U.K. banking startup, opens public Beta". Techcrunch.
  16. ^ "Frequently Asked Questions". Monzo.
  17. ^ "200,000 Customers and £250,000,000 Spent!". Monzo.
  18. ^ "Goodbye Mondo, Hello M..." Monzo.
  19. ^ "Startup bank Mondo is letting customers change its name". Business Insider.
  20. ^ "Mondo is now Monzo!". Monzo.
  21. ^ "The Monzo Current Account Preview!". Monzo.
  22. ^ "Monzo launches current account preview on Android". SpecialistBanking.
  23. ^ "Current Account Progress Page". Monzo. Archived from the original on 12 November 2017.
  24. ^ "Mayor of London's International Business Programme [Annual Review 2020]". ScaleUp Institute. Retrieved 22 February 2023.
  25. ^ Price, Rob. "Startup bank Monzo is ending one of its most popular features — unlimited overseas ATM withdrawals". Business Insider. Retrieved 18 October 2017.
  26. ^ "Connect Monzo to Alexa". Smart Home Geeks. 8 June 2018. Retrieved 8 June 2018.
  27. ^ Send money abroad with Monzo and TransferWise!, 25 June 2018
  28. ^ "Get interest paid on your savings!". monzo.com. Retrieved 13 December 2018.
  29. ^ "London gets another fintech unicorn as Monzo reaches £1 billion". Evening Standard. 30 October 2018. Retrieved 14 June 2019.
  30. ^ "LinkedIn announces top 25 start-ups to work for in the UK". Evening Standard. Retrieved 16 July 2019.
  31. ^ "You can now pay cash into your Monzo account!". monzo.com. Retrieved 15 January 2019.
  32. ^ O'Hear, Steve. "Monzo teams up with Flux to add itemised receipts and loyalty points". Techcrunch. Techcrunch. Retrieved 29 January 2019.
  33. ^ A simple Monzo third party API client for demonstrating the new Receipts API. : monzo/reference-receipts-app, Monzo, 3 February 2019, retrieved 3 February 2019
  34. ^ Stokel-Walker, Chris (6 August 2019). "Monzo's PIN security breach, explained". Wired UK. ISSN 1357-0978. Retrieved 9 August 2019.
  35. ^ Cimpanu, Catalin. "Monzo admits to storing payment card PINs in internal logs". ZDNet. Retrieved 9 August 2019.
  36. ^ Tesfaye, Mekebeb. "Monzo has officially launched loans for its 2.6 million customers". Business Insider. Retrieved 27 April 2020.
  37. ^ Green, Rachel. "Monzo is launching one free and one paid business account". Business Insider. Retrieved 27 April 2020.
  38. ^ "Monzo co-founder Tom Blomfield moves from UK CEO role to president". TechCrunch. Retrieved 18 June 2020.
  39. ^ "Monzo's relaunches its Plus premium offering with Open Banking integrations". AltFi. Retrieved 9 November 2020.
  40. ^ "Monzo Plus garners 50,000 users one month after launch". AltFi. Retrieved 9 November 2020.
  41. ^ "Introducing Monzo Premium". Monzo. Retrieved 27 April 2021.
  42. ^ "Monzo, the British challenger bank nearing 5 million customers, has recruited a new US CEO". TechCrunch. Retrieved 15 February 2021.
  43. ^ "Introducing Monzo Flex – a better way to pay later". Monzo. Retrieved 12 January 2023.
  44. ^ "Using Monzo Flex - a better way to pay later". Monzo. Retrieved 12 January 2023.
  45. ^ "Monzo abandons U.S. banking licence bid". Reuters. 4 October 2021. Retrieved 12 January 2023.
  46. ^ "Last year, we withdrew our US banking licence application and refocused our strategy, which saw Carol Nelson step away from the business." p14, Monzo Annual Report and Accounts, 2022.
  47. ^ "Monzo Moves from Beta to Public Launch in the US!". Monzo. Retrieved 12 January 2023.
  48. ^ "Monzo Raises 4.8M in Interim Funding Round led by Passion Capital". Crowdfund Insider.
  49. ^ "App-only bank Monzo's crowdfunding is almost three times oversubscribed after less than 24 hours". Business Insider.
  50. ^ "Confirmed: UK challenger bank Monzo raises £19.5M with another £2.5M in crowdfunding planned". TechCrunch. Retrieved 14 June 2019.
  51. ^ "Challenger bank Monzo raises another £71M from Goodwater Capital, Stripe and Michael Moritz". TechCrunch. Retrieved 14 June 2019.
  52. ^ "The story of Monzo". Crowdcube. Retrieved 20 October 2020.
  53. ^ "Monzo, the UK challenger bank, raises £113M Series F led by YC's Continuity fund at a £2B post-money valuation". TechCrunch. Retrieved 16 July 2019.
  54. ^ Cook, James (25 June 2019). "Monzo's valuation hits £2bn as the digital bank raises £113m in fresh funding". The Telegraph. ISSN 0307-1235. Retrieved 16 July 2019.
  55. ^ Steve O'Hear (16 June 2020). "Monzo confirms £60M down round, with a new pre-money valuation of £1.24B". TechCrunch. Retrieved 20 October 2020.
  56. ^ "Monzo, the UK challenger bank, picks up additional £60M in funding". TechCrunch. Retrieved 3 December 2020.
  57. ^ Peyton -, Antony (2 December 2020). "Monzo, Mintos and Bitwala bag fintech funding". Fintech Direct. Retrieved 3 December 2020.
  58. ^ "Monzo confirms $4.5bn valuation after closing new $500m round | Sifted". sifted.eu. Retrieved 10 August 2022.
  59. ^ Fuscaldo, Donna. "U.K. Digital-Only Bank Monzo Comes To The U.S." Forbes. Retrieved 11 July 2019.
  60. ^ Garay, Louise. "Monzo Expands Outside the UK, Eyes US Operations | W7 News". w7news.com. Retrieved 7 July 2020.
  61. ^ Warren, Tom (13 June 2019). "Monzo launches its 'bank of the future' in the US". The Verge. Retrieved 11 July 2019.
  62. ^ Horowitz, Julia (13 June 2019). "Britain's wildly popular Monzo banking app is coming to America". CNN. Retrieved 22 June 2019.
  63. ^ a b "Mondo selects Wirecard as their prepaid card issuer". Wirecard.
  64. ^ "What it's like to use a Mondo card and account". Business Insider.
  65. ^ "Monzo Terms & Conditions".
  66. ^ "Monzo Card Design". Wired.
  67. ^ "Breakthrough brands: Monzo, a modern approach to brilliant banking". Fabrik.
  68. ^ Peyton, Antony. "Monzo gently rolls out current accounts". Banking Technology.
  69. ^ "Everything you need to know about our new metal card". Monzo.
  70. ^ "Monzo on Google Play". Google Play.
  71. ^ "What is Mondo Bank (now Monzo)?". PC Advisor.
  72. ^ "A look inside Mondo, a bank that's just an app". Business Insider.
  73. ^ "Crowdsourcing Merchant Data". Monzo.
  74. ^ "Android is here!". Monzo.
  75. ^ "We're Ready". Monzo. Archived from the original on 23 May 2020. Retrieved 23 May 2020.
  76. ^ "Data Sharing and Open Data for Banks" (PDF). Fingleton Associates.
  77. ^ "Government could legislate to ensure open data in banking and other regulated industries by 2017". Pinesent Masons.
  78. ^ "Mondohack IV". Monzo.
  79. ^ a b "Monzo API Reference". Monzo.
  80. ^ Bray, T. (March 2014). The JavaScript Object Notation (JSON) Data Interchange Format. IETF. doi:10.17487/RFC7159. RFC 7159. Retrieved 13 September 2016.
  81. ^ Priday, Richard. "The Ticketmaster hack is a perfect storm of bad IT and bad comms". Retrieved 15 August 2018.
  82. ^ standupmaths (25 July 2018), How to detect bank fraud with maths, retrieved 15 August 2018
  83. ^ "BBC One - Watchdog - Monzo". BBC. Retrieved 19 July 2020.
  84. ^ Magana, Gregory (24 October 2019). "Monzo caught flack for freezing customer accounts without explanation, leaving some without access to their money for weeks". Business Insider. Retrieved 6 June 2020.
  85. ^ "Our response to the BBC Watchdog report: Why we sometimes have to block or close accounts". Monzo. Retrieved 19 July 2020.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Monzo&oldid=1140938269"