Bumped is an app that turns everyday purchases into company shares
If you’ve ever been interested in owning stocks from a company, but have been a little uncertain about how to navigate through brokers and the stock market, a new app aims to make things dead simple. In fact, with Bumped, you hardly need to do anything at all to earn a company’s shares.
About 54 percent of Americans own stocks, according to Gallup, which is down from an average of 62 percent before the 2008 financial crisis. Bumped — a startup coming out of stealth mode — wants to improve those numbers and turn everyone into a shareholder. Its strategy is simple — when you spend money on a company’s products, you receive a percentage of a share from the company (generally around 1 to 5 percent). The idea is to receive shares from places where you’re already spending money, which in turn helps build brand loyalty as you’re more likely to continue shopping with the same brand.
So whether you’re buying a coffee from Dunkin’ Donuts or paying your Netflix bill, Bumped will make sure you start earning shares from those respective companies shortly after you make a purchase; you’ll get a push notification noting “you just got Bumped 40 cents for paying your Netflix bill,” for example.
“We believe everybody deserves to be an owner,” David Nelsen, CEO of Bumped and former CEO of Giftango, told Digital Trends. “This concept of actually aligning interests between the customer and the store they care about, where they both win … is really a very different concept.”
‘We believe everybody deserves to be an owner.’
Nelsen said Bumped spent more than a year in stealth mode going through a Financial Industry Regulatory Authority (FINRA) process to become a broker-dealer, just like brokerages like the Charles Schwab Corporation and Fidelity Investments. But Bumped wants to separate itself from apps and services that are overloaded with charts, graphs, and all sorts of investing nomenclature that may go over many people’s heads.
“Those apps are more about trading,” Nelsen said. “[Bumped] really represents an app that is a brokerage, but it’s an app that really simplifies things and breaks things down to ownership. not trading, ownership. So rather than seeing a bunch of complicated charts, you’re going to see yourself going from a quarter share, to a half share, to a full share of your favorite retailer.”
So how does it work?
After downloading the app, which works on iOS and Android, you’ll be asked to link a debit or credit card you normally use to make purchases. Then once you go and spend money at a participating retailer, Bumped will reward you 1 to 5 percent (depending on the brand) of a share from the company. Some companies may seek to offer a higher percentage of a share as a way to entice a customer to purchase their products.
You should see your investment within a day, but timing varies depending on your bank. While you won’t receive the money instantaneously, the notification works to let you know that a fraction of a share is being allocated right away. Bumped then watches the transaction until completion, and then purchases the fractional share of stock to distribute to you.
You’ll also be able to keep track of which companies you have been most loyal to in different categories — such as whether you shop more at The Home Depot than Lowe’s. Nelsen believes this will help build brand loyalty, as you’re more likely to shop at the place where you can earn shares.
Nelsen said while it depends on how much you spend, the goal is for Bumped users to earn about $100 in rewards per year. You can sell whatever amounts of a share you have whenever you want through the app.
As of right now, Bumped supports the following brands: AMC, Chipotle, DirectTV, Domino’s, Dunkin’ Donuts, Fandango, Jamba Juice, Kroger, Michael’s, Netflix, Papa Johns’, Pizza Hut, Regal, Sears, Shake Shack, Target, The Home Depot, Walgreens, and Walmart. The company expects to bring on more companies for the official launch of the app once it’s out of beta, and there are plans to bring in small businesses down the road as well.
So what happens when shares fluctuate in the stock market? Nelsen said Bumped users likely won’t see much of an impact as the customer is constantly shopping with a retailer, and it may be only after some time — when they accrue a base of ownership in a company — that these fluctuations may show some repercussions.
Removing the barrier of entry
Bumped’s strategy is to remove barriers for people who don’t know how to invest. The stock itself is free — all people have to do is continue shopping. Not only is the app free to sign-up, but there aren’t any additional fees to pay unless you want to transfer the shares in your Bumped account to another brokerage firm (that will cost you $75).
“The last thing you want to do is use your personal money and do something overwhelming with it,” Nelsen said. “So how do you keep it really simple and how do you do it in a way that doesn’t present risk to people? Let’s strip out all of the crazy vernacular, let’s make this really simple and at its most basic level because we’re not a stock trading app, rather, it’s a story about owning stock in the companies you care about.”
But the key part is you’re allowing Bumped to get access to your transaction history. The company does collect this data, and it is shared with affiliated third parties. Any data used for purposes outside of tracking transactions to issue shares of stock will be “aggregated and anonymized.” It’s still a big ask, and if you’re uncomfortable with turning over this data, the service may not be for you.
So why would you want to do all this and own shares in a company? Long-term financial planning.
“We’re in a world right now where the day of pensions are gone,” Nelsen said. “Consumers have to figure out how to protect their future, they have to figure out how to participate in stock markets, and I think this is one of those apps that can help break down barriers by helping educate a consumer.”
If Bumped becomes popular and consumers become large shareholders, Nelsen thinks this new relationship could usher in a new era where “companies are really paying attention to how they service their customer, because their customer is in fact their shareholder.”
“They’re certainly going to be paying attention from two perspectives now rather than one,” Nelsen said. “I feel like we’re in an era where companies have to adopt those types of principles, because we are in an era of corporate social responsibility — the companies that embrace that are going to be very successful.”
If you’re interested in trying out a beta version of Bumped, you can sign up to be on the wait list at Bumped.com. The company will be using the beta to focus on refining the user experience and making sure the app runs as smoothly as possible before setting an official launch date for the final version.
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