A Credit Card Company That Wants You to Spend Less
Ramp CEO Eric Glyman says ditching rewards logic led him to question why businesses need separate tools for cards, bills, and procurement.
David Senra · The $44 Billion Company Building Self-Driving Money | Eric Glyman, RampWhen asked how he explains his company to his own team, Eric Glyman, the chief executive of Ramp, which sells corporate cards and expense software, did not talk about cards at all. His mission, he said, is "to help every business owner get more out of every dollar and hour."
Glyman argues the cards, the expense management, the bill payment, and the accounting automation are just products. What he says he cares about is the dollars passing through a business, and whether fewer of them leave each month.
That view, he believes, is why Ramp began to grow in a market people thought it had entered 175 years too late. Where rivals competed, he inverted what they assumed customers wanted.
Seven years ago, he said, everyone in the card business had agreed that the way to win was points and rewards programs. Spend more, earn multipliers. Glyman said that was the opposite of what the owners and finance chiefs he knew wanted, which was more money in the bank and less employee time spent on expenses.
So he flipped the question. He said, "What if instead of going and trying to get you to be a little bit worse off by spending more than you intended, what if I worked really hard to help you spend less?"
That question, in his telling, led to different product choices. Why, he asked, should buying one thing involve two systems, one to pay and another to record it? Why need a separate tool for bills, another for procurement, and another for treasury?
The test for new ideas follows from that. Glyman said every product or feature starts from whether it saves customers time or money, and judges itself on getting more value from every movement of money through its system.
Questions people ask
How does a card company make money if customers spend less?
Most business card companies earn a fee from the merchant each time you pay, called interchange, plus income from software plans or lending. That means they can still make money when your total spending falls, as long as you keep running what you do spend through their cards and tools.
Why did card companies settle on rewards in the first place?
Rewards are funded largely by those merchant fees and by interest paid by customers who carry balances. Banks found that points encourage people and businesses to put more spending on their cards, which increases fee volume and the chance of interest charges.
What does he mean by two systems for every purchase?
Normally an employee pays with a card, then weeks later someone types that charge into a separate accounting system. Glyman argues that split is wasteful, since the payment is already digital, and wants the card rules, receipt data, and accounting entry to happen as one step.