Monzo (bank)

History

It was founded as Mondo in 2015 by Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman. The team had met whilst working at Starling Bank. In February 2016, Mondo set the record for "quickest crowd-funding campaign in history" when it raised £1m in 96 seconds via the Crowdcube investment platform. Two weeks prior to the name change, Monzo was granted a restricted banking licence, by the Prudential Regulation Authority and the Financial Conduct Authority. Monzo currently has a number of prepaid debit cards in operation which it has issued to users for testing purposes. These cards will be in use until early 2017 when it is anticipated that the banking licence restrictions will be lifted.

On 5 August 2016, Mondo announced that over £20 million had been spent through its Mondo prepaid card.

Monzo is registered at Companies House under the legal name 'Monzo Bank Ltd and 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. As a result, a naming suggestion contest was organised and the new name, "Monzo", was announced on 25 August 2016.

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.

Issued cards

Monzo has issued (with partner company Wirecard) a variety of alpha, beta and investor cards to its customers who want to be early adopters. These are prepaid MasterCards which the user can top-up via bank transfer or an existing debit card.

The balance on the card can then be spent via contactless, chip and pin, magnetic stripe or online.

Like all card providers, Monzo enforces a range of limits on ATM withdrawals, top-up amounts, single payments and the overall balance on the card.

Mobile apps

Monzo has released mobile apps for both iOS and Android phones. 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. Users can categorise their transactions, freeze the card (if lost), mark company expenses and view an overview of their spending habits.

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

A roadmap for Monzo's mobile apps and related services is publicly available to view and vote upon on Trello.

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

Developer tools

Banks in the UK currently offer customers limited or no programmatic access to their financial data. Whilst the UK Government is looking into legislation to require existing banks to comply and adopt standards for secure and open APIs, 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 and maintains 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. The responses are encoded using JSON which allows for data access in any programming language with JSON support.

Limitations

Monzo's current offering consists of a pre-paid card, which by its very nature isn't tied to a traditional bank account. Features such as a current account, overdraft and support for the Faster Payments Service are not yet available as a result of the imposed banking license restrictions.

The company has expressed its intention to do away with a number of banking traditions such as physical branches and chequebooks which it regards as obsolete; this is despite the fact that cheques are still commonly used in the UK, with over 500 million cashed in 2015 alone. Co-founder Tom Blomfield has acknowledged the bank "will not be right for everyone" and described the company's target demographic as those who value convenience and technical innovation.