Monzo, the digital bank in the U.K., could reach 1 million users in a matter of months, according to a report in Reuters.
The report said that the app only bank currently has 750,000 users and is valued at $336 million, but Monzo needs customers to do more than sign up and get friends to join so that they can split restaurant bills. To succeed, Reuters said Monzo needs to get customers to treat it as the main bank account where they get their paychecks deposited and pay their bills.
According to the report, one in five users deposit their salary with the average balance of 1,400 pounds per month, Tom Blomfield, CEO of Monzo, told Reuters. Citing the digital bank’s annual report, Reuters said that annual losses have more than quadrupled to 33.1 million pounds ($44 million) by February and had a user base of around 500,000 users.
Blomfield told Reuters that Monzo has made “real progress toward building a sustainable business,” including reducing costs from 65 pounds per account in September 2017 to 15 pounds per account in June. Net operating income of 1.8 million pounds was short of covering overall costs.
The executive said Monzo could reach the million user count by September or October and, to make money, Monzo plans to use spending data to get customers to use third-party products and services, and get a commission as a result. To gather the data, it tracks customer spending habits to understand how different service providers can save money. In achieving that goal, Reuters noted Monzo needs to get customers to pay for bills via their Monzo accounts.
In July of last year, Monzo disabled card payments after having an issue with a supplier. According to a report in Finextra at the time, the problem happened with transactions being declined and customers seeing incorrect balances.
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