The digital bank’s second attempt at a subscription service appears to be stronger than the first and customers seem interested.
Monzo’s latest premium subscription service has got off to a good start.
While the numbers are encouraging, given paid for subscription’s are relatively new for UK consumers, particularly from fintech banks, the implied revenue run-rate at this level is just an extra £3m per year.
The digital banking darling has a long way to go to help its premium offering move the dial on its growing losses.
For argument’s sake, let’s say that Monzo Plus grows by 50,000 subscribers each month in its first three months (or the minimum length of time a user has to sign up to the service) to 150,000 users.
Monzo’s latest premium offering would only bring in £9m in its first year, which doesn't even scratch the surface of its £113m losses recorded in its recently released numbers for 2019.
If ten per cent of the digital bank’s customers signed up (roughly 450,000) the subscription service would generate £27m.
Monzo admitted its first attempt at a subscription service “didn’t go to plan” and that it was having to “go back to basics and start from the beginning,” following the service’s rocky five months of existence.
It still remains to be seen if Monzo Plus will be as successful as other challenger bank’s premium offerings, but 50,000 customers in one month seems to be a good start.