Monzo vs Starling
Monzo Key Features
- Fast transfers
Starling Bank Key Features
- Fast payments
These two challenger banks both hail from London and are often pitted against one another as they share many similarities, as well as one overarching objective: to shake up the banking experience for individuals and businesses alike. However, when looking at their international money transfer services, there are some major differences between the two. In this comparison we will weigh up these differences, by taking a closer look at the way both banks handle global remittances.
At a Glance
- About Monzo and Starling Bank
- Which brand has lower fees?
- Which brand offers better exchange rates?
- Which brand covers more locations?
- Which brand is faster?
- Which brand offers more transfer & payment options?
- What do users have to say about each brand?
- What brand offers better ease of use, accessibility, transparency & security?
- Additional features
- Case study
About Monzo and Starling Bank
Starling Bank was founded by Anne Boden, former COO of Allied Irish Banks, in 2014. Boden has explained how, over the course of her 30 year career in banking, she began to notice the traditional system was “broken” and that technology had transformed the way people managed their money: this is what led her to the idea to start a whole new digital bank from scratch. In 2021, Starling Bank reported they had opened more than 2 million accounts since they began operating in the UK in 2014.
One year after Starling Bank hit the market, Monzo was born; founded by former Starling employees Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman. Originally named Mondo, the company’s first foray into digital banking was a prepaid debit card; the cards were issued to customers as part of an initial testing programme. After launching full current accounts in 2017, Monzo has gone on to become one of the leading challenger banks on the market, proving their commitment to staying ahead of the curve by regularly introducing innovative new features and enhancing the app’s functions. Monzo partnered up with Wise (formerly Transferwise) in 2018, and has been outsourcing international payment services to this global money transfer powerhouse since then.
Monzo would never have come to exist without the founding of Starling Bank; so it is no wonder the two have been set in opposition since the very beginning. Both companies primarily serve their customers through digital banking apps which have been intuitively designed to make online purchases, international money transfers and in-store transactions super streamlined and easy to manage. In this comparison we will examine each of their service and product areas, to discover who is the best: Monzo vs Starling.
Which brand has lower fees?
Monzo international money transfers are handled by Wise, formerly Transferwise. Wise base fees on the type of transfer requested by the customer: the options include a low cost, advanced or fast transfer.
For everyday money transfers of medium size (up to £500 or equivalent) Wise fees are reasonably low. However, the higher the transfer amount, the more you are likely to pay in fees: these charges will not amount to more than 0.35 – 0.65% of the transfer.
Starling international payments incur a 0.4% transfer fee as a standard flat-fee.
An additional flat fee of £5.50 is added on as a delivery charge when arranging a (more reliable) priority delivery via SWIFT transfer.
The cheaper option is a no recall payment which incurs a tiny flat fee of £0.30; but this method cannot be cancelled or reversed.
In some cases the amount of money deposited into a recipient’s account will be more or less the same, when using Monzo or Starling. However, Starling’s flat-fee structure ensures guaranteed transparency of all international money transfers, and every customer will know what fees to expect right away. Conversely, fees charged by Monzo by way of Wise are determined by the amount of funds being transferred. This can result in much larger fees when transferring upwards of £500.
Which brand offers better exchange rates?
Monzo applies the Mastercard® exchange to all payments made when spending abroad.
However, when arranging international money transfers, Monzo customers can take advantage of Wise exchange rates. This means, in most cases, customers will be offered an exchange rate that is near-identical to the mid-market rate: an average exchange rate spread of just 0.05 – 0.5% is added to Wise foreign currency transfers.
Starling acknowledges that most banks apply exchange rate spreads of around 5% to foreign currency transfers and so, as a challenger bank, the company guarantees transparent rates provided by Mastercard®.
Curious customers can review the live Mastercard® exchange rates by using the Currency Converter Calculator.
Although both banks use the Mastercard® exchange rate as standard, Monzo is in a slightly better position to offer more favourable exchange rates through their partnership with Wise.
Which brand covers more locations?
When it comes to spending abroad, it is free for Monzo customers to use their card to pay for goods and services, and foreign ATM withdrawals are also free up to £200 a month; with a 3% service fee applied thereafter.
In terms of sending money abroad, Monzo’s partnership with Wise enables customers to take advantage of the 61 destination countries covered by the money transfer service provider.
Starling does not charge any fees for overseas spending; whether you are making a purchase or withdrawing funds at an ATM.
When it comes to locational range; Starling facilitates international transfers to 38 – primarily European – countries.
The no-fee overseas spending available to Starling customers makes them an excellent option for international jet setters and avid adventurers. However, when it comes to coverage, Monzo is able to facilitate money transfers to more countries than Starling.
Which brand is faster?
Domestic transfers sent between Monzo account holders are instant. International transfers, however, may take between 1 – 3 working days to arrive with the recipient.
Domestic transfers are processed instantly. International transfers, however, may take between 1 – 3 working days to arrive with the recipient.
There is no clear winner here as the speed of both banks’ transfer services are roughly the same. But Monzo pips it for us as Starling may require further verification on large transactions. Additionally, Monzo's international transfers are powered by Wise, giving them an extra edge.
Which brand offers more transfer & payment options?
Wise handles international money transfers on behalf of Monzo and the transfer options available are as follows:
Fast and easy transfer: the quickest way to send money overseas, paid for using debit or credit card, or a digital wallet like Google Pay. Albeit fast, this option is the most expensive.
Low-cost transfer: this cost-effective option and is ideal for customers prioritising price over speed. This type takes the longest, due to payment via bank transfer.
Advanced transfer: this type of international money transfer utilises the SWIFT network, which typically incurs a fee.
The payment options available with Wise are:
Credit card
Debit card
ACH direct debit
Bank transfer
There are two types of international money transfers available with Starling Bank and these are as follows:
Low cost transfer: for customers prioritising price over speed – this option cannot be recalled or cancelled – transfer fees for this service cost 0.4% of the total amount (minimum £0.30 per transfer)
SWIFT transfer: this type of transfer is sent via the SWIFT network which makes it far easier to track the status of these payments. Transfers sent using this option will be deposited directly in the recipient’s bank and costs the sender the same 0.4% in transfer fees, but with an additional delivery fee of £5.50
The payment options for setting international transfers with Starling are:
Bank transfer only
Based on the number of different options available to Monzo customers when compared to Starling’s offerings, Monzo is the clear winner of this section.
What do users have to say about each brand?
As a challenger bank that is exclusively accessible via mobile or smart device, it is important for us to consider what customers have to say about the Monzo app:
Android users have rated it 4.8 out of 5 stars, and iOS users 4.9, suggesting this is a well designed and reliable application.
On their Trustpilot account Monzo has been awarded 4.5 out of 5 stars:
Positive feedback (88% of reviews) references easy to use mobile interface, efficient technology resulting in quick payments, helpful notifications and spending insights.
Negative comments (12% of reviews) refer to lax security protocol, unexpected account closures and lower than average customer service.
Although you can access Starling online accounts via desktop browser, it is a mobile-based bank. The mobile app has been given 4.7 out of 5 stars on the Google Play Store, and 4.9 on the App Store, meaning it has been well received by users across all smart devices.
On their Trustpilot page Starling has been awarded 4.4 out of 5 stars:
Positive comments (87%) mentions useful and instant spending alerts, easy to arrange money transfers and “split the bill” with friends, as well as a simple and straightforward onboarding process for new customers.
Negative feedback (11%) refers to a lack of communication, slow responses from customer service, as well as claims the company is unable to retrieve stolen funds and ill-equipped to protect customers from fraudulent activity.
Starling has been awarded the prize of Best British Bank at The British Bank Awards, for the last 3 consecutive years in a row.
In 2020, Starling was awarded the additional titles of Best Current Account Provider and Best Business Banking Provider.
User feedback is largely similar and both brands are highly rated online so it was a close call for this section. However, Starling beats Monzo due to the sheer number of high profile accolades the company has been awarded on behalf of the banking community in the UK.
What brand offers better ease of use, accessibility, transparency & security?
Customer service is accessible in one language only: English
Guaranteed transparency as per Wise terms of service
Support can be accessed via the in-app messaging service or by phone
Monzo guarantees FSCS protection up to £85,000
Improvements made to Wise international transfer services as of July 2021
Monthly fees for Monzo accounts range between £0 – 15
Customer service is accessible in English only
Support is available 24/7 and can be accessed via the mobile app’s searchable FAQ section: live chat and direct message function; and direct phone number
Starling guarantees FSCS protected funds of up to £85,000
Clear pricing structure: no monthly fees for account holders, no ATM fees at home or abroad and minimal transfer fees
Starling has won the coveted award for Best Bank of the Year the last 3 years in a row
Although almost neck-and-neck, Starling beats Monzo; excelling in areas such as customer service, pricing and award-winning accounts.
Additional features
Customers can switch energy suppliers through Monzo and will be rewarded with £50 credit
Monzo makes saving easy with their Saving Pots feature and zero interest rates on free savings accounts (up to 1.5% AER on paid accounts)
Monzo offers junior accounts for 16 – 17 year olds
Joint accounts
Customers can use any of the Post Office’s 11,500 branches across the UK, to make cash deposits of up to £20,000
Users can scan and deposit a cheque via the Starling app
Starling supports all digital wallets: including Google, Apple and Samsung Pay
Current accounts for under 16’s
Joint accounts
Business customers can connect accounts to QuickBooks, Xero, FreeAgent
Starling is the clear winner when it comes to additional features; with more mature offerings that cover every personal and business banking requirement.
Case study
Sending £200 GBP to EUR: £1.49 fee/0.7% exchange rate spread/Instant delivery
Sending £1,000 GBP to EUR: £6.67 fee/0.6% spread/1 – 3 days delivery
Sending £20,000 GBP to EUR: £129.55 fee/0.65% spread/1 – 3 days delivery
Sending £200 GBP to EUR: £0.30 or £5.50 fee/3.17% spread/Instant delivery
Sending £1,000 GBP to EUR: £0.30 or £5.50 fee/0.9% spread/1 – 3 days delivery
Sending £20,000 GBP to EUR: £0.30 or £5.50 fee/0.45% spread/2 – 5 days delivery
When put to the test, it would appear it costs more to send larger amounts of money with Monzo, than with Starling. The transfer speed, however, is roughly the same. Therefore, according to this case study, Starling appears to offer faster, more cost effective international money transfers.
Due to the many similarities between Monzo and Starling, this has been a difficult comparison. They are both great challenger bank options and will suit customers looking to open an easily accessible, digital-only bank account. Both banks make it easy to manage and monitor saving and spending, split bills between friends and family, as well as flexible fee-free spending when overseas.
When it comes to sending money abroad, however, things get more complicated. According to our case study, it is cheaper to transfer large amounts of money overseas with Starling, and it is just as fast as Monzo. In addition to this, Starling customer service is available 24/7, and the company has won many awards for their services to modern banking. The bank also appears to be more ahead of the curve when it comes to handy features for business accounts, joint accounts and accounts for under 16’s.
Having said this, due to the percentage-based fee structure applied to Wise transfers, Monzo is the better option for anyone making regular, smaller transactions (under £500 or equivalent). Another scenario when customers would be better off using Monzo would be if they are sending money to countries outside of Europe, as Wise covers more countries (71) than Starling (38). There is no clear winner here and we would recommend either of these challenger banks for foreign currency transfers, depending on the customer’s unique needs.
To make matters easier, check out our comparison tool today to find out what global money transfer provider will suit your needs best.
