Digital challenger banks are changing the face of international bank transfers as we know it, and Monese and Monzo are at the forefront of this revolution. We will be looking at how both companies approach cross-border payments, by reviewing the fees, exchange rates, speed, global coverage and online reputation of each.
Monese and Monzo are two challenger banks born in Britain, having been founded in London’s financial district; but the similarities don’t stop there. Both companies were launched in 2015 and have been making waves in the world of digital banking over the last six years, each taking on the task of enticing customers away from traditional methods of banking and converting them to online banking alternatives.
Monese was developed as a solution to the obstacles founder Norris Koppel experienced after relocating to the UK from Estonia. He decided to redesign the sign-up process, developing a more inclusive, on-demand banking service that enables all customers to open a fully licensed UK bank account in minutes. The Monese registration process bypasses the traditional banking requirements that request proof of a credit history, fixed income, utility bills and residential address. Instead, Monese is widely accessible to customers around Europe, with all features and services available via the mobile app. The company has since expanded its services to include EUR accounts as well as GBP.
By comparison, Monzo primary function is to provide a peer-to-peer payments platform which is currently only available to customers in the UK. As another cutting-edge app-based challenger bank, Monzo has evolved from an original prototype that served as a pay-as-you-go prepaid card, into an FCA regulated bank offering current accounts, overdrafts and loans, as well as international money transfer services. Monzo founder, Tom Blomfield, worked for competitor challenger bank Starling before deciding to start his own venture.
Having familiarised ourselves with the core characteristics of each brand, it is time for us to take a closer look at the finer details of their international money transfer services.
Understanding the fee structure employed by a company is the best way to gauge how much money will reach your overseas recipient.
Monese transfer fees are determined by the type of account the customer holds:
To ensure transparency Monese displays all fees throughout the transfer process.
Monzo has teamed up with Wise to provide low-cost international money transfers powered by experts in foreign exchange.
Wise transfer fees are based on the type of service the customer chooses from the following transfer options: Low Cost, Advanced or Fast.
Wise fees typically do not amount to more than 0.35 – 0.65% of the transfer amount.
Due to the fact Wise fees are figured out as a percentage of the overall amount, the larger the transfer, the higher the fees.
Monzo makes it easy to review all transfer fees in full, using the app, before making a payment: follow this link to find out more.
Monzo has partnered with money transfer giant Wise in a bid to guarantee the best possible price for their customers. Due to the very low fees charged by Wise, Monzo beats Monese in this department.
Exchange rates can vary greatly and it is always worth ensuring you know the exact mid-market rate for your currency pairing before submitting an overseas payment.
Monese claims to offer “money-saving exchange rates” at the wholesale mid-market rate.
Upon closer inspection – using the Monese money transfer tool – it would appear this is not entirely accurate, as most currency pairings incur a small markup. However, the amount of the markup will vary depending on the type of account you have with Monese.
The average markup amounts to 1 – 2% above the mid-market rate which is more competitive than the 4 – 6% markup applied to most other international bank transfers.
Due to their partnership, Monzo customers can take full advantage of the competitive and transparent exchange rates offered by Wise. This means, in most cases, customers will receive an exchange rate that is almost identical to the mid-market rate.
Our research indicates an average exchange rate spread of 0.05 – 0.5% is added to most foreign currency transfers.
Thanks to their savvy partnership with Wise, Monzo has won in this department too, proving to be the best value option out of the two brands.
We will be reviewing the location coverage of both Monese and Monzo, to see which countries customers can send money to and receive money from.
Monese accounts are available to customers in the following 9 European countries: Belgium, France, Germany, Italy, Poland, Portugal, Romania, Spain and the UK; with the bank striving to expand its reach to support additional international markets.
Sending currencies are limited to EUR, GBP and RON, but there are 34 different receiving currencies to choose from.
Monzo is exclusively available to customers in the UK. However, thanks to their partnership with Wise, it is possible for users to send money overseas to 34 countries. As a UK based entity, Monzo is included in the SEPA zone, making Euro transfers the easiest and most popular type of international transfer set up by customers.
Monese caters to multiple European markets as well as matching Monzo’s 34 sending countries. This means customers banking with Monese are able to send and receive money in more places around the world than Monzo customers.
For many customers searching for the right money transfer service provider, the speed at which funds will become available to a recipient is one of the deciding factors.
There are different transfer speeds available with Monese, these are as follows:
International money transfers sent with Wise through Monzo will generally take 2 – 3 working days to arrive with the recipient.
Funds sent in the most popular, standard currencies can reportedly reach recipients within 1 working day.
It would appear customers sending funds abroad with Monzo (via Wise) are likely to experience a faster transfer speed than those sending money overseas with Monese.
Money transfer companies often support multiple transfer and payment options in a bid to ensure an all-inclusive service.
Monese customers can choose from the following transfer options:
Monese supports payments via bank transfer only.
Wise handles international money transfers on behalf of Monzo and the transfer options available are as follows:
The payment options available with Wise through Monzo are:
Thanks to their partnership with Wise, it appears Monzo is able to offer more advantageous and straightforward transfer options for customers who need to move money from one country to another, regardless of budget and payment method.
As two app-based challenger banks, reviewing user reviews posted online will provide insight into the overall experience customers can expect.
On the Google Play Store, Android users have given the Monese app a respectable rating of 4.4 out of 5. Over on the App Store, it has received an impressive 4.8 out of 5. These high ratings indicate Monese lives up to expectations as a useful mobile banking app.
Elsewhere, Monese has achieved an overall rating of 3.5 out of 5 on TrustPilot, with more than 20,000 customers scoring the company based on their experiences.
Despite their average Trustpilot ranking, Monese has received a number of awards from peers in the industry, including the coveted title of Best Challenger Bank at the 2016 European Fintech Awards.
Over 60,000 Android users have rated the app 4.7 out of 5 stars, while iOS users have given the app 4.9 out of 5. This suggests the app is well designed and considered reliable by all who use it.
Over on Trustpilot Monzo has been awarded 4.5 out of 5 stars by more than 17,000 users.
Positive feedback accounts for 86% of the reviews, many of which reference the easy to use mobile interface, quick cross-border payments, helpful real-time notifications and spending insights.
Around 12% of the reviews are categorised as Bad or Poor and they include comments about account freezes and closures, blocked funds and unsatisfactory customer service.
Monzo has also won a string of awards for their services in the challenger bank industry, including the title of Best Banking App at the British Banking Awards in 2020.
Monzo appears to have made a better impression on the challenger bank community than Monese has: having received praise from their peers in the banking industry as well as largely positive feedback from users across the UK.
Identifying how each brand performs in these four crucial areas will provide a more comprehensive understanding of how reliable Monese and Monzo are.
Accessibility: Accessibility is at the heart of the Monese brand, as a challenger bank that was borne out of the CEO’s frustrations with the accessibility of traditional legacy banks in the UK. As a result, Monese is specially designed to be user friendly, with a fast and easy sign-up process that supports multiple languages.
Transparency: When it comes to sending money overseas Monese ensures transparency throughout by displaying the fees and other costs associated with the transfer. However, a number of online reviews cite a lack of communication and failure to explain account closures and delayed payments.
Security: As far as security goes, Monese is a safe, fully licensed bank that is registered with the Financial Conduct Authority in the UK. The company is also a registered electronic money institution (EMT) that adheres to electronic money and payment regulations. Further to this, Monese offers single-device access, secure login and multi-factor data encryption and authentication protocols.
Ease of use: Optimised for mobile use, the Monese app is said to be well designed and very intuitive, with customers rating the app highly online.
Accessibility: Only customers with a residential address in the UK can access Monzo services, and it is also only accessible in the English language.
Transparency: Monzo customers can benefit from the guaranteed transparency of Wise terms of service, with support accessible via in-app messaging, email or phone
Security: Monzo is covered by the Financial Services Compensation Scheme (FSCS) which means customers’ funds are protected (up to £85,000). In addition to this bank-level insurance, sophisticated data encryption and two-factor authentication is used to further protect customer details.
Ease of use: User consensus is that Monzo is quick and easy to sign up for, learn how to use and manage finances with. The clearly displayed categories make it easy to create tailor made budgets and savings pots, review spending habits and set up domestic or international money transfers.
Here we will run through extra features that benefit Monese and Monzo customers, looking specifically at any innovative fintech services that enhance the user experience.
Monese offers slightly more unique and useful additional features than Monzo, all of which are designed to streamline customers’ spending and help them manage their finances better, both at home and abroad.
In conclusion, it would appear that Monzo is the stronger challenger bank of the two, offering the more favourable options for those making an international money transfer. Although only available to UK residents – if you are based outside the UK, we suggest you check out our other company reviews – Monzo’s decision to team up with Wise, titans of the remittance industry, means the company is equipped with the best value deals on the market. Use our comparison engine to see for yourself how much money you can save when signing up with Wise.
Having said this, as this comparison has proven, Monese is a high performing company with a lot of promise as well as many fantastic features. Despite not winning this comparison, we would recommend Monese for anyone based in or travelling around Europe that may need to arrange euro transfers. We hope this comparison has provided greater insight into how these challenger banks handle international money transfers; you can find out more in our Guide to Challenger Banks.
April is a journalist and Content Editor for MoneyTransfers.com. Over the last decade she has written for a range of online and print publications. Having lived overseas in Canada and Vietnam, April hopes to see more of the world as soon as possible, with Japan at the top of her travel list. She enjoys writing about forex trends and the future of banking.