Earn ‘stockback’ instead of cashback? Trust Bank, Tiger Brokers woo S’pore users with this card perk

SINGAPORE – The traditional cashback model is evolving into “stockback”, a strategy that financial platforms are adopting to attract retail investors.

Instead of giving cash rewards, stockback programmes automatically channel everyday card spending into fractional shares of preferred stocks or exchange-traded funds (ETFs).

Trust Bank and Tiger Brokers have both adopted this approach to stand out in a saturated market where brokerage fees are no longer the main revenue drivers. 

Tiger Brokers launched the Tiger Boss debit card in March 2024, while Trust Bank recently rolled out its Trust Freedom card on Aug 13.

The two platforms structure their rewards differently. 

The Trust Freedom card offers a 3 per cent stockback on local and foreign transactions until Dec 31, after which the rate drops to 2 per cent on local spending and 0.5 per cent on overseas spending. 

Once a user accumulates $10 in stockback value, the accrued rewards are automatically invested into a US stock or ETF of their choice, up to $500 a quarter.

Trust said that there is a curated list of 50 stocks and ETFs – including Nvidia, Apple, Berkshire Hathaway, Vanguard S&P 500 ETF and Invesco QQQ Trust ETF – that customers can earn fractional investment rewards on. 

Dwaipayan Sadhu, chief executive of Trust Bank, said the digital bank is working with trading platform Saxo Singapore to offer Singapore stocks, hopefully in the next six months. Depending on customer feedback and interest, Trust will consider extending stockback to include Singapore stocks.

Separately, the Tiger Boss debit card rewards users with a 1 per cent cashback in preferred shares on eligible daily spending until Dec 31. The Straits Times understands that while the terms and conditions are renewed periodically, the current reward framework is expected to remain unchanged.

Tiger said on its website that Boss debit card holders can exchange their earned cashback for “Magnificent Seven” US tech names – like Apple and Nvidia – or for US ETFs.

The online brokerage qualified that the selection of fractional shares offered can change throughout the year depending on market conditions. 

Stockback, the new cashback

Ben Charoenwong, an associate professor of finance at French business school INSEAD, said that capitalising on daily card spending habits is a far more effective and sustainable strategy for a platform to engage with customers than paying for expensive advertisements and giving cash bonuses for referrals.

He added that when an investment platform gives a stockback, users cannot simply spend it, as opposed to getting cash in their bank accounts. They will have to start investing with the platform to realise their reward.

Furthermore, once users own the shares, it becomes more of a hassle to convert their stock position into cash as they have to sell the shares – an action that “carries more friction than spending a cashback rebate”, Charoenwong said.

The Trust Freedom card gives customers the flexibility to choose between cashback, stockback and an upcoming air miles reward option. 

Sadhu said that the customer has the freedom to switch reward categories every quarter. “Any stockback stays in your account until you sell the shares. Similarly, any cashback gets credited directly into your account,” he added.

Stockback also presents an easier way for non-investors to start investing with the rewards they earned on their spending, Sadhu said, adding that it “builds the habit of micro-investing”. 

“Effectively, it allows the investor to dollar-cost average every day,” he said.

Unlike the Trust Freedom card, the Tiger Boss debit card is strictly a stockback card. 

Ian Leong, CEO of Tiger Brokers Singapore, emphasised that the intention of launching the card in 2024 was to “help everyday spending grow into an investing habit”.

“Every fractional share earned through the card goes straight into the client’s account, where users can trade stocks, options and futures,” he said.

Leong added that the take-up rate of the Boss debit card since inception has continued to grow strongly.

In the second quarter ended June 30, card spending rose 37 per cent from the same period a year ago, while total cardholders grew 22 per cent. 

Card transactions continued to pick up in July, rising 19.6 per cent year on year. Transactions per active spender reached 28 a month, Leong said. 

Experienced investors like senior lab technician Dallas Goh are building their stock portfolios by stacking these stockback cards. 

Goh, who has already accumulated a full Nvidia share using the Tiger Boss debit card, plans to use the Trust Freedom card as well to benefit from the 3 per cent stockback.

The introductory 3 per cent rate applies until the end of 2026.  

“It is attractive,” he said, but he noted that because the Trust stockback is capped at $500 a quarter, he will have to use the Trust card first and then switch to the Tiger card to maximise his benefits.

Capturing ‘sticky’ retail investors early

There is a lot of emphasis on attracting more retail inflows from the start, Charoenwong said.

He observed that retail investors in Singapore are loyal and, once they have settled on their “go-to” platform, do not like to move money around so often.

Another online platform, Webull Singapore, has not “received significant requests from clients specifically for a stockback option”.

Webull Singapore CEO Jonathan Man said, however, that the brokerage does see “growing interest in rewards that are directly linked to investing”.

As part of its welcome rewards, Webull offers stock vouchers that investors can use to buy any stock of their choice.

Beyond the initiatives and incentives to attract investors, platforms face the challenge of retaining customers past the promotional period, Charoenwong said.

A sign-up reward may encourage investors to download a platform’s app, but only a great app will encourage them to keep using it. 

He added that investors look for execution quality or the ease and speed of buying and selling shares; uptime, which means the app does not crash; market breadth or the wide selection of investment choices; and low trading costs on the platform. 

Webull’s Man concurred, noting that while rewards may encourage customers to test out a platform, the overall investing experience must “provide enough value” to convince them to stay invested.

Charoenwong concluded that rewards are ultimately designed to bring in new users, not keep them.  

“The true test of whether a platform is competing on what investors actually value, versus competing on the reward headline, is whether the reward is the newest thing about the product or the only thing,” he said.