Monzo has today launched its premium service which comes with phone and travel insurance as it works to convince more customers to pay for its services.
The premium card builds on Monzo Plus, the fintech’s £5 per month product it launched in July.
Chief product officer Mike Hudack told City A.M.: “Monzo Plus gives us a really solid foundation from which to build. And… we’ve listened to folks and added a lot on top of that.”
On top of the Plus features, which include bank account aggregation and virtual debit cards, Premium customers will enjoy phone and travel insurance.
It is Monzo’s latest attempt to push customers into fee-paying services after reporting losses more than doubled to £113.8m last year.
The insurance offering marks a move into the more traditional retail bank space, with Nationwide, Co-op and Lloyds all offering similar products.
The fintech said customers will be covered for loss, theft and accidental damage for phones worth up to £2,000.
Monzo Premium also offers worldwide travel insurance covering medical bills up to £10m and cancellation costs up to £5,000, as well as cover for domestic trips within the UK.
According to research by Consumer Intelligence, the combined annual value of the insurance is £256 a year. Monzo Premium customers will pay £180 a year – £15 a month for a minimum of six months.
Whether launching a new service that offers travel insurance in the middle of a pandemic is wise remains to be seen. Hudack is convinced people will still want to travel: “There’s a lot of uncertainty associated with that and we think that the right travel insurance product can really help.”
But it seems a big risk for the digital bank, which warned there was “significant doubt” about its ability to continue at a going concern earlier this year, given the UK is headed towards another lockdown.
But in a sign that Monzo has not deviated too far from the digital bank space, it is offering Premium customers a metal card akin to those offered by rivals Revolut and N26.
Hudack told City A.M. the bank had responded to strong customer demand for the white metal card.
The new features may well convince non-fee paying Monzo customers to upgrade, which could go some way in weathering the Covid-induced storm.
And Hudack, while remaining tight-lipped about the number of signups he expects, pointed to how “phenomenally well” Monzo Plus performed in its first four weeks.
He told City A.M. that while some people will choose to upgrade from Monzo Plus to Premium, “some customers who have not bought Plus will actually find this to be very compelling… we’ve certainly had lots of customers tell us that they’re waiting for these features to upgrade to a paid plan.”