London-based fintech Monzo is about to hit its 4.4 million account holders with a 3% charge for ATM withdrawals over £250 (US $335) per month and a £5 fee (US $6.50) for replacing a lost card.
Previously, the company did not charge for these services, according to a Finextra report.
The charges are part of cost-cutting measures to help drive Monzo to profitability after it reported a £113.8 million (US $152 million) loss last year, according to the report.
In an blog post, Monzo details the fees, informing customers that for every cash withdrawal, Monzo pays a fee to the ATM company that owns the cash machine. Approximately 20% of customers make up more than 80% of the ATM costs to Monzo, which means the majority of cash withdrawal costs come from a small percentage of clients.
“That’s why we’re asking people who take out lots of cash with us, but could do that for free with their other bank, to contribute toward those costs,” stated the blog post.
Additionally, Monzo will charge customers for replacing cash cards. In the blog, Monzo informed customers that 1% of customers order more than one card each year, making up 35% of total card replacement costs. Although a fee with be charged for customers that lose their card, customers who have cards stolen or used fraudulently will have the replacement charge waived.