With the rise of mobile payment systems like Apple Pay and Android Pay, we're also seeing some other smart banking solutions. If you prefer the idea of sticking to a physical card then Monzo (previously Mondo) is a great option thanks to a feature-packed app and benefits such as no fees abroad.

If you know how Monzo works and just want to find out what we think of it, you can skip ahead to our Monzo Bank review.

And if you're curious about how the bigger smart finance options stack up, check out our comparison review of Apple Pay, Android Pay, and Samsung Pay.

What is Monzo?

In simple terms, Monzo is a smart bank for the smartphone generation which does away with things like bricks and mortar branches, cheque books and the like; instead it hinges around an app.

In its own words Monzo says it's: "Focussed on building the best current account in the world and ultimately working with a range of other providers so that Mondo can be an intelligent hub for your entire financial life."

Users of the Monzo card have spent more than £20m in over 130 countries since launch.

Podcast discussion

Listen to us discuss Monzo and smart banking in our podcast, below.

How does it work?

The Monzo card is a pre-paid MasterCard debit card. This means you don't get a bank account, or a sort code or account number for things like Direct Debits and Standing Orders. Fully fledged cards are on the way, and Monzo will soon issue full debit cards to users - see more on that below.

For now, you can top up the card from the app and use it at cash machines, in-store and online. It's also contactless so you can use it at the same terminals you would with other cards.

The app isn't just for topping up the card (though you do have to do that - including a £100 top-up to start with) - it will also instantly update your balance, provide handy notifications (including why a transaction was declined) and more, such as a neat visual way of seeing where you spend your money. You can also use the app to suspend the card if it's lost or stolen.

There are other benefits including adding notes or receipts to transactions, and the card also won't be blocked if you go abroad – you don't need to notify Monzo about travelling. Plus there are no fees or charges when using the Monzo card outside the UK.

You get the MasterCard exchange rate and you can find more information on using Monzo abroad here.

Future plans include support for Apple and Android Pay, overdrafts, international bank transfers, bill splitting, virtual savings accounts, and integration with partners like TFL and Nectar.

How do I get a Monzo card?

If all this sounds like something you'd benefit from you can sign up to the waiting list on the website or via the app - available for free on iOS or Android.

At the time of writing there are around 40,000 people in the queue for a Monzo card but you can jump forward by referring people via a custom link. Each time someone signs up via your link you'll be bumped up the queue at least 4,000 places.

Monzo bank accounts

In April 2017 Monzo announced that the Prudential Regulation Authority and Financial Conduct Authority had lifted the restrictions on its banking licence, allowing it to operate as a fully authorised, unrestricted bank.

The practical upshot is that users will soon be able to get full Monzo bank accounts to use with the app and card. A small group of users are already testing the accounts, and the company will be slowly rolling accounts out to more existing users over the summer, with people who backed the crowdfunding campaigns likely to get access first.

Once you get a Monzo account, you'll be issued with a new debit card, and can transfer your full balance over to the account. You'll then be able to make bank-to-bank transfers and Direct Debits, and even have your salary paid into your Monzo account.

Monzo warned that it will take a few months to roll the changes out, so we're not expecting new users to get access to the current accounts until late 2017, but we'll update this when that changes.

Mondo or Monzo?

If you're a bit confused about Monzo's name, don't worry: it wasn't always Monzo. When it first launched, the app was called Mondo, but was forced to change the name thanks to a trademark dispute.

The company reached out to its users to suggest new names, with the sole requirement that they begin with 'M', and after receiving 12,560 suggestions, settled on Monzo:

"We’ve been combing through the names and working closely with our legal team to find one that we love and that we feel confident keeping for the next 100 years, which hasn’t been easy," the company said in a blog post.

So if you see someone out and about with a Mondo card, don't worry, it isn't a fake - they'll just have joined the app before the name change. Either way, Monzo or Mondo, the app and service is exactly the same.

Monzo Bank review

We've been using our Monzo card for a few months, and we've found it extremely easy and simple to use.

The card itself, apart from being bright orange (handy when you're looking for it), is no different to any other recently issued ones you'll have in your wallet already. It's the well thought out and excellently designed app which makes the experience so good.

Everything is instant and the way you can view and analyse your spending is on another level compared to traditional banks, despite most recently trying to update their systems. Using the card abroad is just as easy, and it's an ideal option for frequent travellers - with no extra fees and plenty of useful analysis of your holiday spending.

For some, the Monzo card will be just what is needed to manage and keep track of spending, while for others the travel benefits alone will be enough to justify signing up. The pre-paid card could also be used as a very modern way of giving kids pocket money, or simply limiting your own spending if you're prone to getting carried away.

There's also a great feature where if you have the card, you can request money from people who don't have the app. Called Monzo.me it's a way to split bills and pay someone even if you don't have or want Monzo.

If you want to send someone your own custom link, in the Monzo app for iOS tap Contacts > Request to set up the link. For Android, tap Menu > Card > + > Request money. You can then send that link to people via several messaging apps. If you put a forward slash and number after the link it will sepcify how much money you are requesting:

For example, monzo.me/NAME/5 when sent to someone will request £5 (or whichever currency you are set up with). Easy!