Corporate card and expense management services startup Ramp aims to further grow its market share by enabling international payments for its business customers.

Competing against a crop of fintechs in the business-to-business space, including Brex and Bill.com, Ramp is targeting a bigger slice of the $120 trillion global business-to-business payments market, said Geoff Charles, Ramp’s head of product.

“There’s a lot of payments happening in cross-border, a lot of employees are overseas,” Charles said. “From an international reimbursements and international payments perspective, that’s a big focus for us, as the world becomes more and more global.”

The startup aims to roll out that international payments capability in the next 60 days, Charles said. Beyond that, the company wouldn’t provide more details on the forthcoming service.

Since companies have relationships with vendors, employees and contractors all over the world, “powering international payments is critical,” Charles said via email. 

Ramp will face a growing number of competitors looking to do the same for business customers. American Express launched a similar tool in August, and other payments players like Convera and Tipalti aim to serve that cross-border payments need for businesses. 

As finance teams at its clients voice interest in more automation, Ramp also is building “a more advanced procurement process” to automate end-to-end purchases, Charles said. The company plans to launch that toward the end of this year. Ramp wants to become “the single place to manage all outflows of a company,” Charles said. 

The New York-based startup is adding more services as the pool of companies catering to the B2B payments market becomes more crowded. When Brex said in June it would stop serving small- and medium-sized businesses so it could focus on venture-backed startups, Ramp was one of the rivals seeking to scoop up business customers that Brex dropped. Still, when it comes to the small business card market, young fintechs have a very small share; it’s a market dominated by the big banks.

Ramp raised $750 million in March, giving it an $8.1 billion valuation at that time. It has amassed about 10,000 business customers. Founded in 2019, Ramp is fielding “investor demand and interest at our current valuation,” Charles said. 

The company surpassed $100 million in annualized revenue earlier this year, Charles said.

Ramp has reached about $7 billion in annualized payment volume, with its bill pay product – added in October 2021 – accounting for $1 billion of that, Charles said. The startup’s August launch of its flexible payments capability was intended to accelerate growth of that bill pay tool, he said.

With the flexible financing offering, Ramp pays its customers’ vendors, and Ramp customers pay the startup back in 30, 60 or 90 days. Fees can range from 1% to 3%, depending on those terms.

A sizable share of small- and medium-sized businesses front the money needed to create a product and are only paid back later by their customers, Charles noted. Businesses are “looking for financing on that inventory at the lowest cost and the most efficient way,” Charles said. 

In this arena, competitors include providers that allow businesses to pay with a credit card, like Melio and Plastiq, newer players like B2B buy now-pay later firm Resolve and “fairly old school” providers offering merchant cash advances, or Small Business Association lenders, Charles said. 

Ramp’s goal is to allow customers already making payments through its platform to “make a decision at that time around how to finance it” through a one-click process within their workflows, Charles said.

For its small business customers, Ramp also wants to lower the barrier of entry. “Flex is a way for us to monetize without charging for software,” Charles said.

The lending partner network announced this week is another piece of the puzzle as Ramp tries to bolster its value for customers, he said. “For any company that needs more than 90 days of financing, we’ll basically have partnerships for them to look into,” Charles said.

By Caitlin Mullen on Sep 8, 2022
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