Monzo relaunches paid-for Plus account after shutting down service over customer complaints

MARK BLUNDEN
Monzo

App-based challenger bank Monzo has relaunched its premium current accounts after its previous paid-for service was shut down following customer complaints.

The City of London-headquartered star-tup hopes the £5-a-month package will help generate a new source of revenue.

Monzo Plus, which has a three-month minimum sign-up, will offer one per cent interest on balances up to £2,000 and allow customers to check balances on their accounts with rival mainstream banks and credit cards inside its app.

It comes after emergency interest rates were cut by the Bank of England amid the coronavirus pandemic.

Monzo will also offer virtual cards if a customer’s security is compromised, monthly credit checks through reference agency TransUnion and £400 fee-free withdrawals from abroad.

Monzo's co-founders: CEO Tom Blomfield and CTO Jonas Huckestein (Monzo)

The company announced the closure of its first Plus package in late September last year, just five months after it launched, and at the time said that “things haven’t gone the way they should have”.

Its shelved premium model was originally priced at £6-a-month and included “swag” offered to customers such as hoodies and stickers.

Some customers were subsequently refunded after the first Plus iteration was withdrawn after complaining about their accounts appearing closed, outages and login issues.

Now, those who had signed up for the shelved initial Plus service will get two months free.

Monzo is hoping the refreshed subscription model will help boost profitability.

The company was a fintech "unicorn" after being valued at £1 billion in 2018, but then reported an after-tax loss of £47.2 million for the year up to February 2019.

It is competing in an increasingly crowded online marketplace against similar digital challengers such as Revolut, Starling and Atom.

Mike Hudack, chief product officer at Monzo, told CNBC he was confident the firm's updated paid-for banking package would not suffer the same fate as its predecessor.

He said: “We’re going to market with what we consider to be a really great, complete, high-value product.

“I think we’ve taken a dramatically different approach here.”

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