Monzo business transaction fees: rates, exemptions, and how to avoid them

Key takeaways

• Monzo offers £500 in free cash deposits monthly and unlimited free domestic transactions on all business plans, but lacks essential features like international transfers and multi-currency support.

• Foreign transaction fees vary by plan, and even Pro's £5/month upgrade still uses less competitive FX rates than specialist platforms designed for international business.

• Airwallex provides multi-currency accounts with no foreign transaction fees and true interbank FX rates, making it significantly more cost-effective for businesses with any international activity.

Monzo has built a following among UK small businesses with its mobile-first approach and transparent pricing. Unlike traditional banks with complex fee schedules, Monzo's costs are straightforward.

But "straightforward" doesn't always equate to "comprehensive" or even "cost-effective" as your business grows. While Monzo works for UK-focused businesses with simple banking needs, understanding what you'll pay—and more importantly, what capabilities you're missing—matters as your business scales or operates internationally.

This guide breaks down Monzo business transaction fees, explains what's free versus what costs money, and helps you work out whether Monzo's limitations will hold your business back. We'll also show you when purpose-built business banking alternatives deliver better value.

How Monzo business accounts are structured

Monzo offers three business account tiers: Lite (free), Pro (£5/month), and Team (£10/month per user). Rather than charging per transaction like traditional banks, Monzo bundles standard UK operations into the base plan and charges for specific activities like excessive cash deposits or foreign transactions.

This makes Monzo free for many UK businesses operating solely through digital payments with minimal cash. The predictability is appealing—you won't discover unexpected transaction charges for activities you thought were included. However, this simplicity comes at the cost of capability. What Monzo doesn't offer—international transfers, multi-currency accounts, comprehensive global banking—often matters more than what it does as businesses grow.

Monzo business transaction fees explained

Here's what Monzo charges for core transactions:

UK payments and transfers

Faster Payments are free regardless of plan or volume. This includes customer payments, supplier payments, and transfers between accounts. No per-transaction fees, no monthly limits.

Card transactions

Domestic card spending is free with unlimited transactions. Foreign card transactions depend on your plan—Lite uses less competitive exchange rates, while Pro offers marginally better rates but still falls short of specialist international banking providers.

Cash handling

Monzo allows £500 in free cash deposits monthly through the Post Office. Beyond that, you'll pay 2% of the amount. For comparison, competitors like Starling offer £3,000 free—six times Monzo's limit. UK ATM withdrawals are free up to reasonable usage. Foreign ATM withdrawals on Lite incur a 3% fee, waived on Pro plans.

International transfers

Here's where Monzo's gaps become obvious: Monzo business accounts don't support outbound international transfers at all. If you need to pay overseas suppliers or send money abroad, you'll need a separate service. This fundamental limitation makes Monzo unsuitable as a primary banking solution for any business with international operations.

Which Monzo business transactions are free

Understanding what you don't pay for helps calculate Monzo's value—though the limitations matter more:

• UK Faster Payments: Unlimited incoming and outgoing payments to UK bank accounts

• Domestic card spending: Free regardless of amount or frequency

• Internal transfers: Moving money between Monzo business and personal accounts

• Monthly cash allowance: First £500 deposited through Post Office (significantly lower than competitors)

For UK-only businesses with minimal cash handling and no growth plans, Monzo's free Lite plan covers basic needs. For everyone else, the limitations quickly become constraints rather than features.

Monzo fees by business account plan

Here's how the plans compare:

When upgrading reduces total costs

If you make regular foreign purchases exceeding £167 monthly, Pro's £5 fee is offset by FX savings. For teams of 2-3 needing cards, Team's per-user cost may be competitive with legacy banks.

International and foreign currency transaction fees

This is where Monzo's costs diverge significantly by plan.

Lite charges no explicit foreign transaction fee but uses Monzo's standard FX rate, which includes a markup above mid-market. Pro uses near mid-market Mastercard rates with no markup, typically saving 1-2% on foreign spending.

The critical limitation: Monzo doesn't support outbound international transfers. You can spend abroad reasonably cost-effectively on Pro, but you can't send cross-border payments to suppliers. This positions Monzo as suitable for international travel expenses but not comprehensive international operations.

Additional charges and less obvious costs

Beyond main transaction fees, a few costs can catch businesses off guard.

That £500 monthly free cash deposit limit works until you exceed it. Retail businesses or cafés depositing £2,000 monthly pay £30 in fees—£360 annually. For businesses in cash-heavy industries, this limitation becomes a significant consideration. Some traditional banks and competitors like Starling offer substantially higher free cash deposit allowances, making them more cost-effective for certain business models.

Replacement cards are free once yearly; additional replacements within 12 months may incur charges. While this seems minor, businesses with multiple team members or field staff might find replacement costs adding up if cards are regularly lost or damaged.

The less obvious cost isn't a fee—it's capability gaps. As detailed in our Monzo business account review, Monzo lacks multi-currency holding, comprehensive international payment support, and scales expensively for larger teams (10+ members). These limitations mean you might need to maintain accounts with multiple providers as your business grows, creating administrative overhead and complexity even if individual services remain relatively affordable.

Real-world examples of Monzo business transaction costs

UK-only service business: A consultancy invoicing £10,000 monthly, paying suppliers, and making domestic card purchases. Monthly cost on Lite: £0. This represents Monzo's ideal customer—a business that benefits from unlimited free UK transactions without hitting any of the limitations that trigger fees.

eCommerce with cash: An online retailer handling £800 monthly cash (market stall). £300 exceeds free allowance at 2% = £6 monthly, £72 annually. While not prohibitive, a provider with higher free cash limits would eliminate this recurring cost entirely.

International operations: An agency using Pro (£5/month) for foreign software subscriptions ($200 monthly) plus occasional travel. Better FX rates save roughly £20-30 annually on subscriptions alone. The £60 annual Pro cost is more than offset by FX savings, making the upgrade financially sensible for this business profile.

Growing team: A 5-person startup needs cards for all. Team plan costs £50/month. Some traditional banks charge less at this scale, though features may justify the difference. This illustrates how Monzo's per-user pricing can become less competitive as teams grow, particularly beyond 6-8 people.

These examples highlight that Monzo's cost-effectiveness depends heavily on your specific business model and transaction patterns. What works brilliantly for a freelance consultant becomes expensive for a growing team or cash-heavy retail operation.

Monzo fees compared to other UK business accounts

Legacy banks like Barclays or NatWest typically charge £5-£10 monthly plus per-transaction fees (30-65p after free allowances). For high-transaction businesses, Monzo's unlimited free UK transactions become more cost-effective. A business making 100 UK payments monthly could save £30-65 monthly compared to traditional banks once free allowances are exhausted.

Among digital banks, Starling offers similar benefits with £3,000 free monthly cash deposits versus Monzo's £500. Tide charges £9.99/month but includes dedicated support. Revolut Business has various tiers. Monzo sits competitively but isn't the absolute cheapest for all scenarios. The choice often comes down to which features matter most to your specific business needs rather than pure cost comparison.

Monzo excels for sole traders, freelancers, and small service businesses operating primarily in the UK with limited cash. It's less ideal for retail businesses with high cash volumes or companies with significant international supplier relationships. Understanding your business profile helps determine whether Monzo's strengths align with your operational needs.

How to reduce Monzo business transaction fees

Run your numbers to choose the right plan. If you make no foreign transactions and handle minimal cash, Lite is free. Any regular foreign purchases make Pro's £5 fee worthwhile through better FX rates. The break-even point is typically around £167-200 in monthly foreign spending, after which Pro delivers net savings.

Keep cash deposits below £500 monthly by encouraging card or bank transfer payments. For businesses that do take cash regularly, consider if a banking provider with higher free allowances suits you better. The £360 annual cost for a business depositing £2,000 monthly would be eliminated entirely with Starling's £3,000 free allowance.

Since Monzo doesn't support international transfers, consider consolidating international banking with a provider like Airwallex that handles both spending and transfers comprehensively. This avoids the complexity of managing multiple services for different aspects of international business.

Know when to switch: if your team grows beyond 5-6 people, if you regularly exceed £500 cash deposits, or if international business becomes significant. These thresholds represent inflection points where Monzo's cost or capability advantages diminish relative to alternatives. Learn about switching your business bank account when you've outgrown your current provider. The switching process in the UK is relatively straightforward, typically taking just a few days with proper planning.

How Airwallex compares for business transaction costs

Airwallex is built specifically for businesses that operate globally or plan to grow beyond purely domestic operations.

Unlike Monzo's single-currency GBP account, Airwallex provides true multi-currency banking. Hold, receive, and pay in multiple currencies without conversion. Pay US suppliers directly in USD—no conversion, no FX fees, no limitations. This isn't a workaround or a patch—it's how modern international business banking works.

What Airwallex delivers that Monzo doesn't:

• True multi-currency accounts: Hold and transact in 23+ currencies without conversion fees

• International transfers: Send payments to overseas suppliers directly (not supported by Monzo)

• Interbank FX rates: Transparent spreads of 0.3-0.8% vs Monzo Pro's less competitive rates

• Local payment collection: Receive payments like a local business in major markets

• No foreign transaction fees: Zero fees on international card spending

• Team scaling: No per-user costs that become prohibitive as you grow

Real savings for international business:

For businesses spending £5,000 monthly in foreign currencies, Airwallex typically saves £50-100 monthly compared to any card-based approach. Over a year, that's £600-1,200 in savings—substantial savings that grow with your international activity.

Airwallex makes sense for any business that has international suppliers, receives payments in foreign currencies, plans to scale globally, or simply wants banking infrastructure that won't constrain growth. Rather than using Monzo for domestic operations and patching together separate services for international needs, Airwallex handles comprehensive global business banking in one platform.

The choice isn't about Monzo versus Airwallex for exactly the same needs—it's about whether you want banking that limits your business to UK-only operations or infrastructure that supports wherever your business goes.

Conclusion

Monzo offers excellent value for UK-focused small businesses, with unlimited free domestic transactions and transparent pricing. For sole traders and small service businesses operating primarily in GBP, Monzo's Lite plan delivers genuinely free banking with superior user experience.

But as businesses grow or internationalise, limitations emerge. The £500 cash deposit limit, lack of international transfers, and scaling per-user costs mean Monzo works best within a specific business profile. Understanding these boundaries helps you choose appropriately.

For businesses with international operations, evaluating multi-currency banking alongside traditional UK accounts typically delivers better capabilities and lower costs.

Ready to reduce your international payment costs? Open an Airwallex account to access multi-currency accounts, fee-free international transfers, and transparent FX rates built for global business.

FAQs

Do Monzo business transaction fees vary by plan?

Most core UK transaction fees don't vary—domestic spending and UK Faster Payments are free on all plans. The differences appear with foreign transactions: Lite includes less favourable FX rates and 3% foreign ATM withdrawal fees, while Pro (£5/month) offers near mid-market rates and fee-free foreign ATM use. Cash deposits follow the same structure: £500 monthly free, then 2% on excess.

Is upgrading to a paid Monzo business plan cheaper than paying transaction fees?

It depends on your usage. If you never make foreign transactions or exceed £500 cash deposits, Lite remains free. If you spend more than roughly £200 monthly in foreign currencies, Pro's £5 fee is offset by better FX rates. Estimate your monthly foreign spending, multiply by approximately 1-2% (the FX advantage), and compare to the £5 cost.

How are Monzo business transaction fees shown in account statements?

Monzo displays fees transparently in your transaction feed with clear labels. Cash deposit fees appear as separate deductions when you exceed £500. FX costs are built into conversion rates—you'll see the GBP amount and can compare to the foreign currency amount. The app provides monthly spending breakdowns clarifying where costs occurred.

How does Monzo handle transaction fees for failed or declined payments?

Monzo doesn't charge fees for failed or declined transactions. If a payment doesn't complete due to insufficient funds, incorrect details, or recipient issues, no transaction fee is charged. This applies to both outgoing payments and card transactions.