16/01/2017 12:57 GMT | Updated 17/01/2018 05:12 GMT

Why I Gave Up My Debit Card And Haven't Looked Back


Nearly a year ago, the FT ran a feature about the financial woes of the millennial generation. It was pushed out to Twitter in a now infamous tweet: "OMG! 25-year-olds should be saving £800 a month into their pension. CBA with that."

The tweet went viral, drawing the ire of thousands of 20-somethings who, saddled with student debt, sky high rent and wage freezes, often struggle to make ends meet each month, let alone save hundreds of pounds for retirement.

I should know, I'm one of them.

As a 25-year-old living in London on a journalist's wage, the claim was just a little unnerving. If I wanted to retire comfortably, I'd need to contribute a huge chunk of my wage to a savings pot I could only unlock decades down the line.

At the time, I was barely saving any money at all. I'd finish each month in the black, but only just - despite my best intentions on payday. Money would leave my account all too easily, and I wouldn't find out exactly where it had gone until I was nearing the bottom of my monthly budget, by which time it was too late.

Enter Monzo.

I first came across the "challenger bank" through friends. At the end of a lunch out, my pal Muhsin got out a bright orange card to pay the bill. The waiter instantly recognised it - once you've seen it, you can't un-see it - and the pair started chatting about its merits.


Monzo is like Fitbit but for personal finance. It sends notifications to your smartphone every time you make a payment and puts each purchase into one of several categories, including groceries, transport, eating out, cash, bills, entertainment and holidays, among others.

At the start of each month, you set a spending target and you can keep tabs on your progress in real-time. Because it's a pre-paid card - you transfer money from your current account in advance - you don't have to wait for your bank to process the payment. Instead, it sends notifications to your smartphone immediately, bringing an end to the dreaded "pending transaction".

It's that instantaneousness that has made Monzo a real joy to use over the last few months. It categorises my expenditure, geolocates my transactions and adds up what I'm spending in different chains, in real-time.

All this data makes budgeting a lot easier. I now know how much I spend each month on lunch, travel and at the pub, without having to keep a running total based on receipts. The app will go a long way to helping you cut down on the little things that all add up.

In the smartphone era, this shouldn't be revolutionary stuff, but Monzo's service is miles ahead of what most banks offer. Most banking apps after all are no more insightful than the paper statements our parents have been using since they were our age.

And that gets to the heart of the problem with the legacy players.

With tens of thousands of staff around the world, banks are hugely bureaucratic and resistant to change. For some, that's fine. Everyone wants their money to be secure, and an established bank represents stability. But for too long, many banks, burdened by their own legacies, have failed to adapt.

As an app-only bank built from scratch, Monzo and its rivals are in a prime position to disrupt the industry. It might have a staff of just 60 people operating out of its office in Old Street, but in less than two years the company has created a user experience that's in many ways better than the competition.

At no point was that clearer than one night a few weeks into using the service. It was the first time I'd been asked to enter my pin and I'd forgotten it. I used the instant messaging help service to request a reminder and got it back within 30 seconds. It would've taken 10 minutes to get the pin for my other bank card.


As a fully-fledged bank, the service isn't perfect. The team only got their banking license last year, so they don't yet offer a current account, meaning you can't use it for direct debits, standing orders or Apple Pay. But all that will come this year.

Plenty of people will have reservations about putting their cash into a startup bank, but it's worth bearing in mind that beyond the £100 activation deposit (which you access once your card is live), you can put as little into the app at any one time as you want.

And this is a bank with serious backing, including investment from one of London's most respected VCs, big aspirations - CEO Tom Bloomfield says he wants a billion users - and a plan of action directed by its users. The product roadmap is voted on by the community. Can you imagine Lloyds "electing" their next service?

It's a more democratic way of doing banking, and people love it. In March last year, Monzo crowdfunded £1million on Crowdcube in just 96 seconds, breaking the record for the fastest ever equity raise.

People talk about banks being too big to fail. But with a new wave of lean, agile startups like Monzo ready to lure away their customers, the old guard may be too big to succeed.