Corporate card start-up Ramp targets Bill.com with free payments software

Corporate charge card start-up Ramp is going after publicly-traded competitor Bill.com with a free invoice management and payments platform, CNBC has learned.

The start-up has grown rapidly this year by offering small and medium-sized businesses a cash back card paired with software that identifies ways clients can save money. Ramp says that transaction volumes have jumped 50% in the two months since the company last raised funds at a $3.9 billion valuation.

To keep that growth going, the New York-based start-up has set its sights on the clientele of Bill.com, a fintech company that automates the processing and payment of invoices, said Ramp CEO Eric Glyman. Paying invoices is a time consuming, hands-on and error-prone process for most businesses, he said.

“Our software takes what could be multiple minutes to enter and many more to actually make sure you’re doing the right things to a matter of seconds,” Glyman said. “Finance teams are tired of using three or four systems just to make payments and close their books.”

Ramp took a year to develop the feature, which involves using an artificial intelligence technique called optical character recognition to extract information from invoices and automatically fill out forms. Feedback from some of the hundreds of clients who have used bill pay in pilot has been positive, Glyman said.

While Glyman estimates that his competitor has a small fraction of the overall opportunity, Bill.com’s market capitalization has surged from less than $3 billion to about $30 billion in under two years. The company’s stock has climbed 120% this year amid investors’ enthusiasm for all things digital.

Ramp is giving away its software with the hope it will lead to new clients and deeper relationships with existing ones, Glyman said. About 20% of Ramp customers use Bill.com services, he said.

“The current plan is that at launch we want to make this fully free for anyone who signs up,” Glyman said. “I do think this is quite disruptive, but it’s great for customers.”