A new smartphone-based account called Viola Black has launched, pitching itself as an alternative to the hugely popular Monzo. But how do its features stack up?
Viola Black arrived at the beginning of 2019 with a punchy marketing slogan, currently displayed across the London Underground, stating: 'Move over Monzo. Download Viola Black: the new modern money management tool.'
Read on to find out how Viola Black fares against its competitors, and whether or not it truly is a rival to the likes of Monzo, Starling Bank and Revolut.
Viola Black has pitched itself as an alternative to Monzo, but the two are very different in reality. Monzo is a bank account, while Viola Black is a prepaid card.This means you can only spend money you have already loaded onto your card.
Viola Black is rolling out slowly, and anyone who signs up will be placed on a waiting list. Because of this, Which? has not yet tried the app.
Joining the Viola Black waiting list does not cost money, but since it has not announced a timeline for when the service will be widely available, it's best to treat the product as a potential future prospect, rather than something you could start using today.
Once your Viola Black account is up and running, you're given an account number, a sort code, and a prepaid Mastercard debit card which you can top up via the accompanying app.
The app will also allow users to make payments, view breakdowns of their spending and set category-specific budgets.
Viola Black customers will be able instantly lock their cards from the app. Since the card does not link to a bank account, victims of fraud can only lose the balance they have loaded onto the card. This is the case with all similar prepaid cards.
You can make card payments abroad without any fees, and Viola Black allows you to store multiple currencies on your account.
Viola Black does not offer users a current account. This means you won't be able to set up direct debits or standing orders, nor will your account be able to receive salary payments - all features that Monzo, Starling and .
Overdrafts aren't available either, though Viola Black considers this part of its promise to offer 'complete control of the money that is available to you' without borrowing.
A key difference between Viola Black and Monzo is the new challenger's fees.
The minimum fee for Viola Black members is £4 a month. The extensive list of payable fees also includes £2.90 for sterling ATM withdrawals, a £2 'inactivity fee' if a card goes unused for 120 days, and a £2 fee for foreign ATM withdrawals plus 1.5% of the withdrawal amount.
For Monzo users intrigued by Viola Black's ad, these fees may come as a shock. But Viola insists that its service is worth this premium.
Though it is authorised by the Financial Conduct Authority (FCA), Viola Black deposits are not protected by the (FSCS) - the independent body that acts as a safety net for customers if a financial company goes bust.
Viola claims its customers don't need FSCS protection since it is not a bank. Instead, customers' money is held in ring-fenced, segregated bank accounts which will always belong to customers even if Viola goes into insolvency.
Viola chairman Christopher Hamilton told Which? Money he considers the account's target audience to be 'everybody' and the brand's competition to be 'any bank'. But comparing Viola Black to popular mobile banks creates a stark contrast.
Currently, the mobile banking market is dominated by two major players: Monzo and Starling Bank, neither of which charge monthly fees.
With more than one million customers, Monzo has grown into one of the most successful UK startups in the finance sector.
Monzo customers can open full current accounts, allowing them to pay in their salaries, set up direct debits and spend into their overdrafts. The Monzo app also provides spending analytics and allows users to freeze their cards if lost or stolen.
More than 400,000 people have opened Starling Bank accounts, which offers many similar features to Monzo, including spending analysis and the ability to freeze your card.
Starling pays interest on current account balances - a unique feature among branchless banks. Customers can expect 0.5% AER on balances up to £2,000, and 0.25% AER on anything between £2,001 and £85,000.
Both allow fee-free card spending overseas. Monzo places a £200 monthly limit on foreign ATM withdrawals - above that amount it charges 3%.
|Debit card||Overdraft||Paying in||Deposit protection||Spending analytics||Fees|
|Monzo||Yes||Yes||Bank transfer, Salary payments, Cash deposits via PayPoint||FSCS (up to £85,000 per individual)||Yes||No|
|Starling Bank||Yes||Yes||Bank transfer, Salary payments, Cash deposits via Post Office||FSCS (up to £85,000 per individual)||Yes||No|
|Viola Black||Yes||No||Bank transfer||Ring-fenced account||Yes||£4 per month, £2.90 per ATM withdrawal, plus a list of additional fees|
The most similar products to Viola Black on the market are other prepaid cards and its closest competitor is app-based Revolut.
Revolut is astand-out sterling prepaid card, offering market-leading exchange rates and no fees for overseas spending. It is managed via a smartphone app, and you will need to download the app before you can get the card.
Once you have aRevolut account, you can transfer money to it via your debit card, Apple Pay (if you have an iPhone) or bank transfer.It offersfee-free foreign spending and overseas cash withdrawals, butwithdrawals of more than £200 a month are charged at 2% per withdrawal.
|Monthly fee||Direct Debits||Salary Payments||ATM withdrawal fees||Inactivity fees||Additional features|
|Revolut||£0 for u201cStandard”|
£6.99 for u201cPremiumu201d
£12.99 for u201cMetalu201d
|Yes, but only in EUR||Yes||Free for withdrawals up to £200, 2% on withdrawals over £200||None||Integration of Revoluttravel insurance|
Collect 'spare change' in savings
|Viola Black||£4||No||No||£2.90 in the UK, £2.00 plus 1.5% abroad||£2.00 inactivity fee after 120 days||Multiple cards for family and friends,|
Donate 'spare change' to charity
Despite Viola Black's marketing, prepaid cards are not really an alternative to a bank account. Monzo and this new product are quite different beasts.
If the ability to spend abroad fee-free is the appeal, Viola Black could be worth considering alongside other similar prepaid cards although it has some way to go to match the well-developed features of Revolut. Starling Bank's debit card, which allows fee-free spending and unlimited ATM withdrawals, could also be more attractive.
When choosing a prepaid card, pay close attention to any fees you may be charged. If you plan to use one for money management, you'll start getting hit if you make ATM withdrawals or you don't use it regularly.