Digital bank Monzo has closed its fee-charging packaged current account to new customers five months after launching it and is refunding some of those who signed up.
After being criticised by customers, the app-based bank said the premium service, Monzo Plus, “isn’t the best it could be”, and that things didn’t go according to plan. As a result, it is going back to the drawing board and may ditch Monzo Plus altogether.
The move is both a financial and PR blow for the company, which said recently that “there’s still plenty of work to do to get to profitability”.
Monzo recently passed the 3-million customer mark and is particularly popular among millennials.
Monzo Plus, which included features such as travel insurance and travel money, launched in April and was a key part of the company’s revenue strategy.
The bank initially offered a discounted monthly fee of £3. Then in August it unveiled a range of bundles costing up to £12 a month. One bundle, called the Supporter, cost £4.95 a month and offered exclusive Monzo Plus merchandise such as water bottles and T-shirts, plus access to prize draws to win metal payment cards.
But two weeks ago the bank admitted that, while a “significant number” of people had signed up for the Supporter package, “takeup of the new bundles isn’t what we’d hoped it would be” and it was therefore rethinking Monzo Plus.
In the latest development, a post on Monzo’s community forum, appeared to admit that many customers had been unhappy. It said that following the announcement two weeks ago, “we’ve decided to go one step further and start from the very beginning”.
One of the headings on the post reads: “New team, new product, new name?” Meanwhile, anyone clicking on the Monzo Plus section of the website will be met with a message saying it won’t be available for a while.
Tom Davies, a product marketing manager, said in the post that anyone who had an subscription and wanted to cancel could do so by contacting customer support.
He added: “If you’ve chosen our Supporter bundle, we’ll be automatically refunding the amount you’ve paid in fees, plus some interest, because you’re missing out on some of the features we offered.” This reflects the fact that the bank will not be sending out any “swag” or holding the prize draws.