Monzo Spends £29.5M on Referral Rewards as Marketing Costs Soar 40%

British digital bank Monzo paid out £29.5M ($39.7M) through its customer referral programme during the 12 months ending in March, according to company filings cited by the Financial Times this week.

The figure marks a nearly 40% rise compared to the same period a year earlier. Meanwhile, the bank's overall marketing expenditure climbed by almost half, reaching £143M ($192M) over the same timeframe.

Monzo's refer-a-friend scheme rewards both existing customers and new sign-ups with payments ranging from £10 to £50 ($13 to $67) when a referral is completed. Competitors including Revolut and Chase operate similar initiatives to drive user growth.

John Cronin, founder of SeaPoint Insights and a financial industry analyst, described the scale of the referral investment as "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.

Earlier this year, Monzo withdrew from the US market, a move that highlighted the structural difficulties neobanks face when expanding internationally.

PYMNTS Intelligence research indicates that while consumers are open to experimenting with new financial apps, turning them into primary banking relationships proves challenging — especially when core services like lending and deposits remain tied to regulated entities with established infrastructure.

Research conducted by PYMNTS Intelligence in partnership with Trustly shows that digital bank customers are significantly more inclined than traditional bank users to adopt alternative payment methods when incentives and protections are available.

Key findings from the study include:

• 44.6% of digital bank customers prefer digital wallets over physical cards, nearly double the rate seen among the broader banking population
• 52.2% of digital bank users earn less than $50,000 annually, compared to 30.8% of the overall sample
• 72% of surveyed consumers said pay-by-bank could replace debit cards if rewards and buyer protections were offered

The data suggests that digitally native banking customers have already adapted to payment experiences emphasising speed, embedded authentication, and app-based financial management rather than physical credentials.