Shift in Banking Preferences for Small Businesses
For many small and medium-sized enterprises, financial decision-making often hinges on their bank account balances. A striking 92% of small business owners rely on this figure when making financial choices. Yet, as noted by Joseph West, a co-founder and CEO at Relay, traditional banks often lack the clarity needed for owners to confidently navigate these decisions.
This gap in visibility has prompted a noticeable trend. Many of Relay’s 110,000 U.S. customers have shifted away from larger banks like Wells Fargo and Bank of America. What’s interesting is that the competition isn’t the big banks they’ve left behind; it’s other fintech platforms that focus on catering to the financial needs of small and medium-sized businesses.
Relay offers a solution through integration. Rather than juggling bank accounts, payment systems, and accounting tools separately, businesses can streamline their operations with Relay. They can open up to 20 checking accounts, automate transfers, and even issue debit cards with preset spending limits. Many small businesses find it useful to adopt an “envelope system” to organize funds for payroll, taxes, and various expenses.
West explained that Relay is designed to scale alongside its users. Setting up an account through a partner bank can be completed in about ten minutes. Admission is free, and revenue is generated through deposit interest, debit interchange fees, subscriptions, and transaction fees.
“You can start without any cost,” West stated. “As businesses develop, they often upgrade to paid services, transitioning from free accounts to invoices, more advanced cost management features, and deeper integration with accountants.”
Recently, Relay has hit a significant milestone, surpassing $1 billion in customer deposits and managing around $3 billion in monthly transaction volume. West sees this achievement as indicative of how small businesses prefer to manage their finances.
“While reaching a billion-dollar deposit level is thrilling, our main focus is on what comes next,” he remarked.
The future plans include introducing AI-powered invoices, automated billing, reminders for late payments, and tools to enhance cash flow.
Reflecting on the evolution of technology for small businesses, West shared, “In the last 15 years, we’ve provided tools typically reserved for larger companies. The next phase is about offering roles and support that allow owners to manage effectively without needing to hire additional staff.”
Growth has been further supported through partnerships with accountants, bookkeepers, and services that integrate Relay accounts during business formation. The software helps reduce the time it takes to reconcile accounts significantly, a benefit that has garnered attention through word of mouth.
Relay’s aim is straightforward. Small businesses have already made the choice to leave traditional banks. Now, they are racing toward engaging with fintech solutions that can effectively manage their financial operations.
