Monzo Mobile Bank Could Clear One Million Users in Months
Mobile-only banks are something of a new animal, and might even be considered one of the ultimate expressions of mobile payments. Mobile payments have caught on in the United Kingdom in a very big way, and as such, it’s not a surprise to see a mobile bank gain in similar fashion. One of the latest such efforts on that front, Monzo, is poised to hit a major milestone soon, as word from Reuters figures it could hit the million-user mark in a few months.
Given that Monzo currently counts about 750,000 users to its credit, that’s not a projection out of line. Better yet, it’s valued at $336 million, so that could give it an edge in terms of raising money to make for further innovation. It’s innovation it’s going to need, however; right now, it’s being used mainly as a way to split restaurant bills among friends, reports note. It’s almost being treated like a peer-to-peer mobile payments platform.
To truly become a successful mobile banking platform, it’s going to need more. It’s already getting about 20 percent of its total user base to treat it like their main bank—they’re depositing their entire paychecks and keeping an average balance of about 1,400 pounds sterling a month therein—and it’s going to need all it can get. Reports from the bank’s digital annual report suggest losses in the multi-million-pound range and rising, but that was back when the bank had a user base of half a million, not three-quarters.
In a move that may not help the company much, Monzo reports plans to use spending data to push customers into third-party services and products, and derive commission earnings therein. While it might help raise cash, it might also not exactly endear customers to the operation. A digital-only bank should be a winner, just offering the typical banking services. After all, its overhead is so much slimmer than an ordinary bank, so if it made the same revenue, profit would be much larger. Throw in a few innovative measures like mobile payments capability and it’s a recipe for success.
But with Monzo selling user data as a way to raise cash, the company could be looking at hard times ahead even as its user counts rise. At least, for now.