Relay Targets the SMB Banking Gap Left by Big Banks

Watch more: Business Banking Platform Relay Evolves Into SMB Command Center

For most small businesses, the bank balance is still the financial dashboard.

“Ninety-two percent of small business owners make financial decisions based on their bank balance,” Relay co-founder and CEO Yoseph West told PYMNTS. “The problem is, with traditional banks, you just don’t get the visibility you need to make those decisions with confidence.”

That visibility gap has fueled a shift. Many of Relay’s 110,000 customers in the United States have already left big banks such as Wells Fargo, Bank of America and Chase. The competition now is not the incumbents they abandoned. It is other FinTech platforms building tools to run a small- to medium-sized business’s (SMB’s) financial life.

Relay’s answer is integration. Instead of cobbling together a bank account, bill pay system, invoicing software and accounting tool, businesses can use Relay to consolidate them. Owners can open up to 20 checking accounts, automate transfers and issue debit cards with spending limits. Many SMBs prefer this “envelope system” to segment payroll, taxes and expenses, which helps avoid mistakes that can derail operations, West said.

The model is designed to scale with customers. Accounts are opened through partner Thread Bank in about 10 minutes, West said. Entry is free, with revenue generated through interest on deposits, debit interchange, subscriptions, transaction fees and foreign exchange.

“It’s free to start,” West said. “As businesses grow, they tend to expand their use of paid services, moving from free accounts into invoicing, advanced expense controls and integrations with accountants.”

Relay recently crossed $1 billion in customer deposits and processes about $3 billion a month in transaction volume. West called the milestone a validation of how small businesses want to manage their money.

“The $1 billion deposit milestone is exciting, but the real priority is building what comes next,” he said.

On the roadmap are artificial intelligence-driven invoicing, recurring billing, automated reminders for late payments and cash flow optimization tools.

“The trend of the last 15 years has been giving small businesses the tools of larger firms,” West said. “The next 15 will be giving them the roles, the administrative support functions, so owners can operate with similar discipline without adding staff.”

Growth has been supported by partnerships with accountants, bookkeepers and incorporation services that bundle Relay accounts at formation. Relay’s software can cut the time to close the books by nearly a third, a benefit that spreads by word of mouth.

Relay’s bet is straightforward. Small businesses have already made the decision to leave big banks. The race now is among FinTechs to capture them and become the platform they use to run their business finances.