Fintech Startup Stash to Launch "Stock-Back" Debit Card Rewards
If you’re looking for a new credit or debit card, you’ll quickly notice that there are a lot, and I mean a lot, to choose from. Uber Technologies Inc. will let you work toward free food deliveries; Amazon.com Inc.’s includes a gift card; Ikea's looks like it's made of wood.
From the card operators’ perspective, you had better make sure you have a unique enough offering to stand out in a massive pool of options. The latest company to try is Stash Financial Inc. The New York-based personal finance and investing startup plans to announce on Tuesday a new “stock-back” feature on Stash debit cards.
The pitch: Next time you shop at Amazon, pay your Netflix Inc. bill or pick up groceries from Kroger Co., rather than earning cash back, you’ll earn fractions of shares of the companies' stock. The rewards start at 0.125 percent of spending, less than some other cash-back credit cards, though the company said the rate could reach as much as 5 percent depending on deals and promotions. For purchases at, say, a local restaurant that doesn’t trade on the public markets, customers will earn shares in a related exchange-traded fund.
Stash also plans to announce on Tuesday that it has closed a new funding round of $65 million, much of which will go toward adding additional products like this card. The startup joins a growing number of fintechs that are dabbling in more bank-like services. In Stash’s case, it will partner with existing bank Green Dot Corp. The company hopes to generate a profit from transaction fees and driving people to its other investment products.
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