Monzo Steers Customers to Backup Bank Amid Technical Outage

British neobank Monzo was sending customers to its backup bank Wednesday (Aug. 19) morning as it dealt with an outage.

“We’ve identified some issues affecting Monzo and activated Monzo Stand-in, our fully independent backup bank,” the bank said in a post on X. “As a result, you can still make card payments, withdraw cash, freeze your card, send and receive bank transfers, and more. We’re rolling out a fix and moving quickly to get full service back up and running for everyone. Thanks for your patience.”

Still, a report by the BBC noted that some customers commented on that post that Monzo Stand-In was also experiencing issues, and that they still couldn’t use their cards.

Another report by British news network GBN said that customers of Santander were dealing with an apparently separate tech issue when trying to withdraw money from ATMs.

Founded in 2015, Monzo has banking licenses in the U.K. and Ireland and a customer base made up of 16 million consumers and 1 million businesses.

The company has been spending heavily on courting new customers, according to a Financial Times (FT) report in May. Monzo paid out 29.5 million pounds ($39.7 million) on its “refer a friend” program in the 12 months leading to March, per company filings.

That’s an increase of nearly 40% over the same period a year earlier. Monzo’s marketing spending also rose by nearly half to 143 million pounds ($192 million) within the same timeframe, the report added.

John Cronin, a financial industry analyst and founder of SeaPoint Insights, told the FT the increase in Monzo’s referral spending was “staggering.”

“The referral schemes are quite an eye-opener, there’s a huge amount being paid out. They are really paying for their growth—it’s a standard tech playbook,” he said.

In other digital banking news, recent PYMNTS Intelligence research—from the report “Pay by Bank Deep Dive: Digital Bank Users Are Ready to Switch”—shows that digital bank users are increasingly making mobile wallets their default method of payment.

The research found that 44.6% of digital bank customers prefer digital wallets, versus 22.7% of consumers overall.

“That broad use gives banks, merchants and payment providers a clearer path to introduce new payment options,” PYMNTS wrote last month. “Digital bank users already understand login-based checkout and tokenized credentials. Moving them toward Pay by Bank may feel less like teaching someone a new language and more like adding a familiar word to the conversation.”