Global Fintech Series Interview with Yoseph West, Co-Founder and CEO at Relay

Hi Yoseph, tell us about yourself and more about Relay, how has the platform evolved since starting up?

I co-founded the company with Paul Klicnik, today our VP of Engineering, in 2018. We recognized that SMBs go to their bank balance to understand their financial picture—not accounting software, and not another back-office app.

From my time at Wave (acquired by $HRB for $407M) and then Hubdoc (acquired by $XRO for $70M), we knew that business owners check their balance daily to inform business decisions. For example, “My balance is $100k, I know payroll is coming up, we’re still waiting on a few invoices, can I afford this other expense?” The challenge here is that the traditional bank balance lacks key information that SMBs need to get a full and real-time view of their cash flow.

According to SCORE, nearly 1 in 4 small businesses say that managing cash flow is their biggest challenge. Since day one, this is the problem that Relay set out to solve. Our platform gives SMBs full cash flow clarity so that they can make the best money management decisions for their business.

At its core, Relay was a solution for SMB owners and their internal or external finance functions to create and label multiple checking accounts into which they could sort their income. By assigning each account to a specific expense category (e.g. payroll, tax payments, ad spend, etc.), SMBs gained a better, more accurate view of their cash flow. Today, this remains core to Relay’s offering as we’ve continued to build up our powerful business banking suite for SMBs.

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We’ve also enhanced our core offering with other powerful features and tools for business banking. To name a few:

• Integrating with tools that centralize all parts of business banking: We have direct API integrations with QuickBooks Online and Xero, meaning businesses get a reliable bank feed in their accounting software, helping to speed up accounting work by as much as 5x. We also integrate with Gusto, which allows us to provide payroll shortfall alerts to ensure SMBs are never at risk of missing a payroll run.
• Becoming the official banking partner of Profit First:Profit First is a behavior-based cash management methodology and a book of the same name by serial entrepreneur Mike Michalowicz (over a million copies sold). It teaches business owners to disburse their income across multiple accounts, with each assigned to a different business expense category, including one account set aside as their profit.

For SMBs using traditional banks, the first hurdle to implementing Profit First is setting up multiple accounts. Often banks will charge account fees, enforce in-person requirements to open accounts, and set low limits on the number of accounts available. Relay wanted to remove these hurdles for businesses, which is why last year we became the official banking platform for the Profit First community. Here’s how Profit First works on Relay:

1. Create multiple checking accounts within the platform and label them. For Profit First, business owners can set up five core accounts: Profit, Income, Operating Expenses, Tax, and Owner’s Compensation or Payroll.

2. Set up auto-transfer rules to allocate funds from the Income account across the other four accounts, setting specific Profit First percentages or dollar amounts. Owners can even schedule auto-transfers for the exact allocation dates outlined in Profit First, i.e., the 10th and 25th of each month.

• Offering credit products to give SMBs a cash flow safety net: Relay recently launched a credit card(currently in beta), giving SMBs 1.5% cash back and enabling team spend controls based on category, project, and vendor. The card provides business owners with a cash flow safety net so they have more flexibility and control over their spending.

• Launching powerful features that enhance cash flow clarity:
  • Multi-Player Finance:SMBs users can create multiple logins for a Relay account and then assign set permissions for team members who need access. This avoids the need to pass around one shared login to access the banking, which is often the only option for traditional banking.
  • Receipt Capture:We provide detailed transaction data and enable users to capture and match their receipts within the platform, centralizing expense-tracking directly into their business banking. This helps owners know exactly what they’re spending on and stay audit-ready.

We’d love to hear about your latest funding and how it’s set to redefine the product roadmap?

We know from our user feedback that lending options are a high priority for SMBs on Relay. They want access to that cash buffer that will provide them flexibility and peace of mind so that they can cover their business expenses in a pinch, e.g., running payroll, cost of goods sold, advertising spend, taxes, etc. Our credit card was the first step to solve this need.

This raise unlocks a new chapter in Relay’s product development, with a line of credit product as one of our key next steps. We’re also working on other direct platform integrations to build out our full business banking suite to offer valuable insights, time-saving solutions, and complete cash flow clarity.

How is banking software from the global fintech market evolving: can you talk about some of the top features that have piqued your interest off late?

I don’t need to tell you that “fintech” as a category has become very broad.

The reality today is that there’s a huge diversity of fintech platforms, products, and services that have exploded onto the scene in the last 10 or 20 years, from payment tools to point of sales systems, to crypto, to business banking, to accounting platforms, to payroll processors–the list goes on and on…

What I care about is, what can we do to support the SMBs who still struggle with their business banking, while other areas of fintech barrel forward? We won’t leave small businesses behind. For many of them, cash flow is their top issue, even beating out business costs, revenue/sales, and availability of credit. The features I’m most interested in are the ones that unblock cash flow issues, so SMBs have better visibility and control. Specifically, I’d point to some of the Relay features mentioned earlier:

• The flexibility to easily open multiple accounts and disperse your income across them to smoothly manage your money.
• The option to implement the Profit First methodology directly in your business banking to stay on the money.
• The ability to integrate different parts of your banking, accounting, and payroll for a full suite, one-stop experience.
• The security and convenience that Multi-Player finance gives SMBs to safely and easily access their banking across set permissions.

For me, it’s about the big picture: we’re now giving SMBs the powerful banking tools that large, enterprise businesses have always had the deep pockets to build for themselves. It’s about leveling the playing field so that SMBs have the cash flow clarity they need to run and grow their business.

What about today’s state of digital banking / online banking needs a complete shift?

SMBs in 2024 have enough on their plate. Between high interest rates, volatile inflation, and a changing labor market, the last thing a business owner wants to deal with is a subpar business banking experience.

The way I see it, there’s been widespread innovation in fintech products that serve general consumers over the past 10-15 years, e.g., PayPal or Venmo. Why should small business owners expect any less innovation from the money management tools they use for their own banking? SMBs deserve a banking platform that works as hard as they do. This is where I see the shift taking place.

Companies like Relay are redefining a new era of banking. We’re responding to the evolving needs of the market. For example, it’s not good enough for online banking to simply show a bank balance and expect a business owner to understand their cash flow. It’s unfair to ask a small business owner to come into a physical branch just to open an account, and it’s even more difficult when there’s an account fee attached. It’s not secure to expect a team of 10 employees to pass around login credentials for a business banking account.

These are all obstacles Relay overcomes to provide SMBs full cash flow clarity. We’re driving the shift in SMB banking that puts business owners in the front seat, so they can make the best money management decisions for their business.

Can you highlight more on some global banks who sport the best digital banking app initiatives?

While I can’t speak to specific apps offered by global banks, our users regularly tell us that our mobile app is a huge benefit for them.

The ability to bank on-the-go is a game changer for the real estate agent who’s going from open house to open house, or for the contractor who’s on-site most of the day. They love being able to keep their eye on the money anywhere and anytime.

One great example of this is Madeline Pratt, Founder & CEO of Fearless Foundry, a strategy and branding firm. Madeline used the Relay app to secure her money when she was on her way to a conference and she noticed that a senior employee was committing fraud at her firm. Multiple bank accounts were at risk and had to be “reset” (i.e., closed and reopened with new account numbers). Most banks would take weeks to do this. Fortunately, Relay’s mobile app allowed Madeline to reset her accounts in minutes without ever losing access to her funds, all while on the go.

What would you say about the future of business and online banking before we wrap up?

Gone are the days of bookkeeping on paper spreadsheets. Today’s SMBs want modern tools that simplify their business banking and give them greater visibility and control of their money.

Relay is always in touch with our users, conducting surveys, speaking with business owners, and analyzing product engagement data to anticipate SMB needs and deliver innovation to meet them. What sets us apart and keeps us at the front of the pack is our core understanding that cash flow clarity is key to the success of any business. This will always be our guiding principle, and it’s the reason 100k+ customers choose Relay to stay on the money.

There’s no shortage of new apps, programs, and tools for small businesses, but the closer technology solutions are to money, the more impact that technology can have on improving their business outcomes.

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