Challenger bank Rho rolls out features for larger companies
Rho Business Banking has rolled out a new set of features aimed at larger businesses than the venture capital-backed startups it initially attracted.
The challenger bank launched last October with checking and a treasury management account that holds up to $75 million per customer by spreading $250,000 "packets" of funds among partner banks. It also offers free domestic ACH and wire payments, an expense management system that lets employees from a single team upload receipts and invoices, and a corporate credit card with same-day settlement that pays 1% cash back for companies that spend more than $100,000 each year.
Those features were all designed to appeal to small startups. The new ones, announced Thursday, are for businesses with closer to 100 to 200 employees.
There will be no fees to send international wire transfers, aside from a 0.5% foreign exchange fee. Companies can get up to five checking accounts per single tax ID and keep track of these accounts in one dashboard. And the account owner can customize permissions so that people from a variety of roles in a single company, such as employees, investors, bookkeepers and finance administrators, can share Rho logins to use virtual corporate cards, initiate wire transfers, approve payments and view company financials.
“This enables companies to offer their whole teams a place within Rho,” Alex Wheldon, a co-founder of the New York-based company, said in an interview. “That could be an employee simply getting free access to safe and controlled spending to investors that want read-only access.”
Wheldon said that Rho acquired several new customers in the second quarter, mostly through referrals from existing clients, and that 90% of them came from larger institutions such as Bank of America and JPMorgan Chase.
“Their demands were different,” Wheldon said of the larger clients Rho has landed. “They expected ready access to things like permissions and dual controls.”
Rho says that several hundred businesses bank with it. Checking deposits are held at the $487 million-asset Evolve Bank & Trust in Memphis, Tenn., while credit and treasury products are held at more than 100 banks and lenders.
Business neobanks argue that their services are increasingly in demand among small businesses, especially since the pandemic has temporarily or permanently eliminated many traditional jobs. For example, they offer accounts with low or no fees, digital onboarding, assistance with expense categorization and more. Only eight of the top 30 U.S. banks offer digital onboarding to customers, according to Javelin Strategy & Research.