database of credit card and rewards program information in the United States. Wallaby’s algorithms crunch data about user preferences and rewards programs to recommend to users which of their cards applied to a particular purchase will best bring the cardholder closer to a financial goal. Depending on the user, that goal could be more points, but it could also be minimizing fees or reducing interest. “The average user is not going to sit down and do that math,” Goldman says. “We try to do that math for you in case that competitive decision crops up in your wallet.”
RewardStock’s objectives are more targeted than Wallaby’s. The Raleigh company’s algorithms help users earn and redeem points specifically for travel. But both companies generate revenue the same way. Though their apps are free to consumers, RewardStock and Wallaby make money through affiliate marketing relationships with credit card issuers, which pay the companies a referral fee each time a user acts on a credit card recommendation. RewardStock does not book travel but the company’s software can steer users toward better ways to book flights, which can also trigger a referral fee. In the future, Hayes plans to expand RewardStock’s revenue sources by developing more of these relationships with travel providers.
Hayes says RewardStock stands out from other rewards apps by offering personalized strategies tailored to a user’s travel goal. Also, unlike some apps, RewardStock won’t ask for personal financial information from users, nor does it access a user’s accounts. Hayes says his previous work in finance made him mindful of consumer security concerns. Even though RewardStock doesn’t collect or store user financial information, Hayes says he made it a point for RewardStock’s systems to offer bank-level security.
RewardStock represents a homecoming for Hayes. Born in Durham, NC, he graduated from the North Carolina School of Science and Mathematics, then Princeton, where he majored in economics. Hayes worked on Wall Street for Citigroup (NYSE: [[ticker:C]]), rising to vice president. But Hayes says he and his wife knew that New York would not figure into their long-term plans. Compared to New York, the new father says North Carolina is more affordable for starting a family and launching a company.
Last fall, RewardStock raised $300,000 from Cary, NC-based Cofounders Capital. Hayes says the seed financing should carry the company through 2016 as RewardStock grows. As Hayes fine tunes RewardStock’s software, he is developing new ways to serve users and diversify revenue. One of RewardStock’s key consumer targets is engaged couples. Just as Hayes financed his honeymoon with rewards points, he believes other couples would be interested in finding ways to defray their own honeymoon costs. The attire, food, and venues for weddings require lots of spending—all of which can be strategically placed on plastic in ways that maximize rewards points, he says.
RewardStock’s longer-term weddings strategy overlaps with the weddings focus of another Raleigh startup. WedPics’ photo and video-sharing app has already gained market traction and sparked interest from investors, who have pumped more than $12 million into that company to date. Hayes says he has met WedPics CEO Justin Miller, who “likes what we’re doing.” Though Hayes says it’s premature to talk about a partnership, he concedes that the thought has crossed his mind.
“Certainly, there are some obvious ways that we could potentially explore [working] together,” he says.
Photo courtesy of Flickr user GotCredit under a Creative Commons license.
