Stock rewards have obvious appeal to shoppers: Why not own a piece of the company where you’re spending money? It’s possible that those programs may become more common in the near future, as the company powering stock rewards programs recently won patent approval and is hoping to see them expand.
Apex Fintech Solutions, a self-described “fintech for fintechs,” which powers much of the behind-the-scenes technology and workflows for several popular companies in the space, won approvals for its patent related to stock rewards programs, which operate more or less the same as airline miles or the kind of retailer-specific rewards programs that you might find at retailers such as Target or Starbucks.
Though the company only recently saw its patent approved, stock reward programs have been available to consumers for several years. Stash, for instance, launched a Stock-Back rewards program in 2019, effectively rewarding consumers with fractional shares of stock depending on where they used their card. Using your card to make a purchase at, say, Amazon could net you fractional shares in Amazon stock as a reward. (Disclosure: The author was previously employed by Stash.)
But now, with patent in hand, Apex’s leadership is hoping to see similar stock rewards programs expanded across the country with individual retailers.
“The patent filing was done quite a while ago, and we have been doing this and offering it as a service for a number of years,” says Bill Capuzzi, CEO at Apex Fintech Solutions. Capuzzi says that the company’s stock rewards API—which is what won patent approval—allows any Apex customer to adopt stock rewards programs. That’s a win-win for consumers and retailers, he says.
“It’s an interesting time right now,” he says, “as you start thinking about credit card companies, airlines, and retailers, and start thinking about companies that have installed rewards programs—and the notion of turning a consumer into a shareholder. Now, that’s possible.”
Stockholders = more loyal customers?
The idea of turning a customer into a shareholder could mean that customers would become even more loyal to a specific retailer. Capuzzi hopes that will be attractive to CEOs who may be thinking of ways to attract more customers, or for ways to shake up their current rewards programs.
“As the market’s come roaring back, there are more companies interested in this as an alternative,” he says. “When you own stock in something, you’re more willing to buy it again as a shareholder as a consumer.”
The value proposition is interesting for consumers, too, who could slowly accumulate fractional shares over time and build a portfolio—without much effort at all.
“There’s really a go-to-market notion now,” Capuzzi says. But “the biggest challenge is getting companies to understand that this is actually something that they can do—there’s more meaningfulness behind a stock rewards program versus what they’re doing today,” he says. Perhaps most important for potential retailers? “There’s very little lift on their side.”
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