Fintech
How Companies Like Brex and Ramp Make Money
They give away the software for free and still print money. The trick is interchange — and it's hiding on every swipe.
Corporate card startups hand you slick expense software, unlimited cards, and often no subscription fee. So where's the revenue? Follow the swipe.
The fee hiding in every transaction
Every time a company card is used, the merchant pays a small percentage — interchange — that gets split among the players moving the transaction.
How it works
- EMPLOYEE SWIPES CARD
- MERCHANT PAYS INTERCHANGE
- CARD NETWORK ROUTES IT
- ISSUER (via Brex/Ramp) EARNS A CUT
- SOFTWARE STAYS 'FREE'
The card is the monetization. The software is the wedge that drives spend onto the card.
How it makes money
- Customers
- Startups and companies that need corporate cards, expense management and bill pay.
- Business model
- Primarily interchange on card spend, plus savings/treasury products and premium tiers. The expense software is often free to maximize spend volume.
- Why it matters
- Free software drives more spend onto their cards; more spend means more interchange. Their incentive is aligned with your volume, which is why onboarding is frictionless.
Aligned, but read the incentive
The model rewards more spend. Ramp famously markets savings tooling — a smart counter-position — but always know what a 'free' fintech product is actually optimizing for.
Where's the opportunity?
Vertical spend software (for construction, healthcare, restaurants) that bundles a card can capture interchange the horizontal players leave on the table.
Interchange-funded models scale with GDP of their customer base — durable, but sensitive to regulation like caps.
Ledgering, reconciliation and real-time authorization systems are deep, valuable engineering problems inside every card program.
Interchange regulation and rate-cap pressure can compress the core margin overnight.
Key takeaway
When a fintech product is free, the transaction is the product. Interchange turns 'free expense software' into a volume business — the software just exists to grow the swipes.