Renowned for corporate card and expense management, Ramp is now expanding its portfolio by launching a new financial product named Ramp Treasury, stepping into the realm of digital banking. This product aims to provide its consumers with an opportunity to earn money in addition to saving it.
Eric Glyman, the CEO and co-founder of 6-year-old fintech startup Ramp, believes that this product, with its potential of earning interest, is intended to work in tandem with customer’s existing bank accounts rather than replacing them.
The distinctive feature of this product allows businesses to store cash in a business account to earn a flat yield of 2.5% or potentially higher yields in a money market fund. Companies can gain quick access to their liquid cash stored in the business account, ideal for bill payments.
Despite similar fintech entities in the marketplace like Mercury, Brex, Navan, Rho, and Mesh Payments, Ramp is not positioning itself as a digital bank but is partnering with banks like the First Internet Bank of Indiana and Apex for cash deposit and investment respectively.
The inauguration of the treasury account marks a significant step for Ramp, promising to bolster the company’s profits and providing a one-stop solution by enabling customers to manage their cash without moving it between different accounts and organizations.
Revenue-wise, the company remains discreet. Nevertheless, it records a growth in its customer base, reaching over 30,000 up from around 15,000 from the past year, and it powered over $50 billion in purchases across cards and bill payments, a notable increase from $10 billion 18 months ago. Similar to many fintech corporations, Ramp monetizes through various sources like interchange fees and transaction fees for every swipe with a Ramp card and bill payments, earning SaaS revenue from customers who upgrade to its Plus offering, and affiliate fees from its travel product, among others.
The expansion with its Treasury product enables Ramp to earn a spread from its bank partners on aggregate across all customer’s business accounts, which is partly credited back to the customers as an earn rate, ensuring company profitability. Ramp also anticipates an IPO in its long-term plan aiming to build a robust business, according to Glyman.
Original source: Read the full article on TechCrunch
