Finance automation and corporate credit card startup Ramp has launched a treasury product that lets clients store cash in a business account and earn interest.
Ramp argues that businesses face a tough choice when it comes to managing cash: they can either maximise earnings or have quick access - but not both. This often requires finance teams to keep money in accounts that earn low or no interest for easy use, or lock it away in higher-yield investments that are cumbersome to access.
This trade-off is why over 80% of businesses' operating cash is stored in a bank account that doesn't earn anything. On top of this, 3 days of working capital and incremental earning potential is lost waiting for transferred funds to settle with their vendors.
Ramp Treasury promises to change this, offering firms the option of storing cash in a business account that earns 2.5% or in an investment account with the potential for higher yields.
Ramp says the product not only lets its clients earn more on their operating cash, they also get three extra days of working capital and incremental earnings by paying bills the day they're due.
The launch is part of Ramp's ambitions to automate more areas of the financial tech stack beyond payments, shifting into the banking sphere - although Ramp stresses that it is not a bank and the account is not a deposit account.
"The old treasury playbook meant either constant micromanaging of cash positions and payment dates… or just accepting you'll lose out on interest. The new playbook is refreshingly simple: let technology do the heavy lifting, so you don't have to," says Eric Glyman, CEO, Ramp.