Luke Ladyman: How Cheddar Turned Cashback Into Autopilot

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:00] Sammie Ellard-King: My name is Sammie Ellard-King and welcome to the Money Gains podcast. We’re a show about making, saving, and investing your money, interviewing the leading minds in the industry to uncover their knowledge and expertise. If you’re new here, be sure to hit that follow button as you won’t want to miss the show. And this week, my guest is Luke Ladyman, co-founder of the amazing Cheddar app. And we dive all into his journey creating the app Cheddar Solutions, how they’re offering amazing instant cashback, how they’re innovative in terms of their open banking software. It is a really, really cool episode getting to know Cheddar a little bit more. I know you’re gonna love it, but for now, let’s get started on the Money Gains Podcast. So, Luke, welcome to the Money Gains Podcast, man. How are you doing? You well? I’m great. Thanks for having me. It’s uh it’s exciting to be here. Yeah, I can’t wait. Obviously, we bumped into each other at a recent award, and congratulations on winning best newcomer app. That’s amazing, dude.

[1:16] Luke Ladyman: I think we should put it back on you. Congratulations on winning uh Money Content Creator. It’s uh your content’s great. I’ve been listening for quite a while, so uh kudos to you. But uh yeah, no, thanks. I appreciate the uh the accolades. Uh, what did we get? Best newcomer. That was uh quite a surprise.

[1:31] Sammie Ellard-King: Mate, amazing. Like I absolutely love what you guys do. Me and the missus saved a ton of money over Christmas. I was actually talking to Chloe about this, Chloe’s Dills Club on a podcast that we did earlier in the week. And I was like, mate, they had the MS gift card, and like we just went in because we have a big family. We were like buying like three, four hundred pounds worth of stuff, and we put all of it on there, saved tons of money. So, first off, thank you. And uh yeah, I mean, you’ve just hit 100,000 downloads, it’s all going on for you guys right now. I’d love to hear a little bit about like you, the app, and um and what you guys do.

[2:10] Luke Ladyman: Well, firstly, no, thank you. Um, Chloe’s a big fan of ours. I know you are as well. I can I can vouch outside this podcast, you have emailed me previously saying to just what you just said there. So uh it’s uh all advertising is good advertising. So and I really appreciate that. And that’s basically exactly what Cheddar’s created to do is to help people on mass, like on an individual level, you know, you with your family, which is great to hear that you’re you’re leveraging the MS uh the MS savings, um, whether you’re single as well, uh leveraging it for your delivery savings, who knows, whatever walk of life you’re in. But um, that’s exactly where the app started out is how can we help people, which actually came from when I was in my 20s and struggling financially, which I’m sure we’ll we’ll deep dive into. But um, as you alluded to, Cheddar itself, right now, what it looks like as a consumer app is a money-saving app that helps you save instantly in your day-to-day um expenses. So whether that’s from um your commute with the train line, whether it’s your coffee, whether it’s your groceries, whether it’s your takeaways, whatever it looks like. Today, it’s an instant cashback savings app. What happens in the future? We can deep dive into that on the on the other gains. Uh, there’s there’s many more gains coming, but we’ll we’ll get into that. But uh yeah, it’s good to hear. As you mentioned, we crossed that 100,000 um actually user. So downloads is is a bit more than when it comes to the conversion. We’ve actually got 100,000 users itself, and growing is the main thing. So uh yeah, onwards.

[3:34] Sammie Ellard-King: What I would say is that I love the user experience of the app, it’s so easy to use. Like you’ve really put that first, and it makes a big, big difference because when you jump on an app and it’s clunky and you can’t find what you want, and I just immediately switch off, especially as a brand marketeer myself. Like that’s one of the first things that I will gravitate to, and that’s what I immediately found when I downloaded Cheddar for the first time. And the train line thing, man, was a game changer. I back when I was commuting into London every day, that small percentage it was racking up, and you know, that was an amazing partnership. But let’s dive into a little bit about you and your journey before we get into the app because it’s a really cool story, and I’d love to know sort of early days of Luke, how you’ve come to be a co-founder of uh of a cashback app. And yeah, let’s let’s dive in, man.

[4:26] Luke Ladyman: Yeah, it’s very colourful. Um, very, very colourful. So maybe we can start back when uh when I I don’t know, maybe from early, early life. My couple of very humble beginnings, as as do most people, but um came from a family. Mum had me very, very um young in her life. She was 16 actually when she uh gave birth to me, um, which came with its own challenges, benefits, and challenges. Obviously, having a parent that that’s that’s close to an age means that we we get on very well. But it means that um had me at 16, my brother at 18. Upbringing was uh a challenge, to say the least, um, financial challenge as well as other challenges, but bear in mind this is a finance podcast that’s focused on that part. Um it just meant that I was a bit more acutely aware of finance and the impact that can have on people’s upbringing and day-to-day life. Um, fast forward um to when I was say 18, my passion was always to be an airline pilot.

[5:17] Sammie Ellard-King: Oh, okay.

[5:18] Luke Ladyman: So at yeah, so at um at 18, 19, I actually flew off to New Zealand to train to be an airline pilot. Um, it’s a job that requires about a £120,000 investment to get your license, which I borrowed from a bank, um, on the premise that I had a job lined up already with EasyJet of all people, and you pay back a thousand plus per month over a you know extended period of time to draw down on that uh on that debt. Um, and that’s actually where the sort of unconsciously the beginnings of Cheller started because as with any job, you start off as an apprentice, you know, be a plumber or a pilot, your income isn’t as big as it as it has potential to grow to. You’ve got a lot of debt over your head. For me, it happened to be my pilot loan. For other people, it could be their student loan. Um, trying to find your feet with housing, with rent. Um, times were hard. Time times were were a struggle, um, to say the least. And I’m sure I know everyone at the minute’s walking through um said struggles, especially with the cost of living these days. But that struggle at the time, the tools I had available to me were quite limited. Um, there’s things I didn’t didn’t do um that set me up for a tougher time in my 20s. You turned to things like payday loans, for example, which you know um are very damaging to your credit score. You turn to borrowing money where you can to make ends meet, all these things you do in a very real situation here, and there just weren’t the tools available to me at the time to thrive. You were just in survival mode at that time, right? Um, but that struggle, I would say, is what created my initial journey of entrepreneurship, which was um my partner at the time actually had a lingerie brand, and I I stepped in to help her with a bit of the digital marketing side of things, created the website, e-commerce website. It was built with something called Magento, which my co-founder of Cheddar actually was one of the directors at Shopify. So he might kill me for saying that, but I built a website on Magento, um, and that just gave a lot of insights into digital marketing and getting the brand out there to the public, um, retail, how retail works, how the consumer psychology, um how they think, how they buy, how they purchase, how they return. Um, but we’ll get on to that in a second. And then through that process, I then went on to create a management consultancy business, which could go to market strategies for consumer brands such as Moleskin, Ferrari, BMW within the uh retail space in the UK. Again, massive lessons, supply chain management, how to um create a brand story, how to manufacture goods, how to um execute in-store um sales, training, marketing. And fast forward several years later, with those, that skill set that I developed and experienced, it always went back to actually what am I trying to achieve in life? Who am I trying to help? And there’s always that 20, 21, 22-year-old Luke in the back of my mind thinking, hey, like I need help here. Like, can you help me? Can you solve a problem? And then that is in a roundabout way where Cheddar started. My co-founder went on a similar journey to me. Um, he himself created a company that made apps, which is always for Cheddar’s always a good start. And that very handy, very handy. That company was actually acquired by Shopify, and he was director of product at Shopify. So that’s where you mentioned that the UX to the app is quite nice. That’s where that comes from. He obsesses over you know, um a customer-first experience. Um, so we joined Forces actually, uh, and Cheddar itself started off as a payments app, would you believe? Um, it currently has payments functionality built into it, so you can request money from people, which we’ll get into in a minute. Um, and you’ll actually see the payments part when you buy gift cards. You can actually see the payments rails sort of underline the functionality of the app. But it started as a payments app. Um, when I was an airline pilot, I’d fly around the world. Um, you know, you go out for dinners of 18 people, um, you you pay the bill for ease, request money back from people, you never get paid. Um, same with Tarek, he’d travel obviously with Shopify and whatnot, pick up a bill, would never get paid back. So we actually created a bill splitting solution where you could request money from somebody, it would pay you directly into your bank account using a technology called open banking. What open banking does basically is with with the consumer’s permission, you can connect your bank account um to a third-party app like Cheddar, confirm things like your sort code, account number, transaction information, balance information, and that third-party app will deliver value. Our value at the time was payments. And what we discovered is that actually the odd payment now and then wasn’t the true pain point we’re trying to solve. It’s actually how can you find savings in people’s everyday lives and reward them for their loyalty? And then that in a roundabout way is how we’ve then iterated and come across Cheddar today, which is that cashback app. And uh, yeah, that’s the journey of Cheddar. Love that journey.

[10:18] Sammie Ellard-King: Absolutely love it. It’s so cool though, because like you probably had this like weird idea in the back of your head, not a weird idea, but like an idea in the back of your head that you wanted to help your younger self, but you didn’t know what that was yet. And you need to go on this whole journey and meet all of these amazing people in your life before the kind of cards fall into place. And that’s why I really wanted to ask this question because I feel like a lot of our audience will like be pushing themselves to like, I’ve got to do something, I’ve got to start something, I’ve got to start something. And often the cards just need to fall in the right place, and that may happen in your 20s, 30s, or 40s. It doesn’t necessarily matter. So I always love hearing an entrepreneur’s journey, and so interesting about the airline pilot as well. That’s cool.

[10:58] Luke Ladyman: Exactly that. And what I’d always say is lean into your passions. So one part I actually missed is that I created this will sound more glamorous than it is, so uh it comes with a caveat. I created a private jet brokerage business. What that actually means, I didn’t own any private jet or anything like that whatsoever. But you know, living in London, friends of friends, connections knew that Luke was an airline pilot, um, be it for EasyJet, which is not private jet as we know. But if anybody ever needed a private jet within our extended network, um, I would be the person that would get the phone call. So my initial reaction was, no, I can’t help there, but let me find somebody who can. Um and I had uh one particular friend who did work in the private jet network that would help. And one day I thought, actually, how difficult can it be? I had this mindset of if someone else can do it, you can do it to an extent. Yes, you have to have the capital analysis, uh, capital to execute. I thought, how difficult can it be? So what I actually did was just create a website, just a simple website that had pictures of planes, what private jet charter looks like, and actually lead generation form, which was just click here, submit your details, and go from there. Um and it did a few charters on the back end of it. You get some inbound leads, you’d act upon it, and I did some charters. And although it never became anything more than just a bit of a side hustle, there’s a lot of lessons I learned from that. So the website you see today on Cheddar, the way we talk to customers, the obsession at that level of luxury, you have to get every detail right. Yeah. Um, and it’s so though that’s that side hustle with the obsession from aeroplanes actually gave me the business acumen on what we do today. Um, so to your point, people out there thinking, what can I do to make extra income? What is your passion? Start there and see how it evolves. It doesn’t have to make you a thousand pounds a month day one. You probably will lose money initially with setup costs, but it’s the lessons and learners and experience that no university or no particular courses can teach you. It’s that consistency applied every single day that will lead to a bigger outcome.

[13:03] Sammie Ellard-King: Oh, 100%. I love that you said that. Like I’m reading um Russell Brunson’s Expert Secrets at the moment, and it’s such an amazing book. And something that came up in there, which I was like, I love the way he frames it because I was trying to find a framing for this. But he basically says if you’re 10% ahead of someone, then you’re then they are looking to you for advice. And Frank Abagnale, who we all know from Catch Me If You Can, played by Lee. Quite a funny relation there. Funny relation with airlines there, actually, isn’t it? Pilot. Yeah, no, that’s why I was like, oh, I’m gonna bring this one up. So um he was obviously faked being an airline pilot as one of his jobs, but one of his jobs was a sociology teacher for an entire semester at a really top university in the US. He they asked him, how on earth did you get away with it for a whole semester? And he just said, Well, I just need to be a chapter ahead of everybody else. And I loved that, and I think that’s a really important framework for business a lot of times, jumping in and figuring it out along the way, and then turning around and teaching the people behind you. That’s where often the money is. Um, so I want to try to ask you the early days when you’ve created this payment app. When was it that you realised then? Was it about a year or two in that you realised that there was more to this and a bigger problem that you wanted to solve?

[15:05] Luke Ladyman: Exactly that. So we actually took our inspiration from well, firstly, we looked at what technologies existed that could deliver on our vision. So, our vision, if you look at the US, you have the likes of Cash App, you have Venmo. Um, in the Netherlands, you have an app called Tikkie. And what these apps do is if you need to request money from people, it’s a verb. It’s in in the Netherlands, it’s oh, just Tikkie me. And basically, what Tikkie is it’s an app that attaches to your bank account, very similar to how we how we operate, where you just send money to people using their mobile phone number. You don’t have to write down the IBAN, one digit’s wrong. Um, so we created this payments app in the UK to make paying each other a bit more simple. As you can imagine, Sammie, if I say to you, I’m going to transfer you, you know, £20 for yesterday’s lunch, it’d say, okay, what’s your sort code? What’s your account number? Um, in the UK, it’s instant. We have this single faster payments, which to keep it short, if you send a bank transfer, usually within seconds it’s received by the recipient. But you still need to get the six-digit sort code right and the eight-digit account number. Thankfully, the single comp it’s it’s it’s frustrating, it’s a pain in the backside, which often means you don’t send money immediately. It’s often like in the in the evening, you sort of wait, you send the details, and you chase in. Have you sent the money yet? Oh yeah, yeah.

[16:17] Sammie Ellard-King: Have you chased me? Yeah, yeah.

[16:18] Luke Ladyman: Right, where’s my cash? Yeah. We have five-of-sides football each week, and trying to get money out of people is just it’s it’s a pain in the backside. So we looked at that pain point. We knew that that on its own wouldn’t be the monetisation strategy, but we well, you could it’d be difficult to monetise, so I should say. But that wasn’t that wasn’t the initial goal. The initial goal was can we save a solve a pain point, a problem um en masse? And that was a lot of people’s pain points and problems. Now, the challenge you have within a lot of circular friends, we discovered this is being an airline pilot, one app we used to use a lot, but still use a lot, is Revolut. And Revolut’s initial um USP unique selling point was that when you go abroad, they had zero transaction fees. When you use your car, take out money. So all of my pilot community and friends all have Revolut. So Revolut to Revolut payments, super easy. There’s no need for a Cheddar. Equally, if you’re a Monzo, Monzo to Monzo, super easy. We were solving the Revolut to Monzo use case or the Monzo to Lloyd and the Lloyd’s to what have you. And what we discovered is that the pain point is there because people are using the app, but they weren’t flocking en masse. We would go to universities with a big spin wheel that would, you know, you’d you’d spin the wheel wherever it landed on, it’s like five pounds. You’d be like, okay, let’s send you the money. And they’d be like, oh, here’s my sort code account number. You’d highlight the pain point and be like, well, if you were on Cheddar, I could just ping the money to you very straightforwardly. So they joined Cheddar, linked their bank account, we pinged them five pounds, three pounds, two pounds, what have you. The challenge arose where the virality just wasn’t quite there. And there’s still a bit of a trust element, which we can touch on later, around linking your bank account to an app that doesn’t give you the value on a day-by-day-by-day basis. And that’s when we had the Eureka moment, which is a lot of people join apps or switch bank accounts or join platforms led by incentives and rewards. Why do you join Amex? What is it about Amex that you like? Oh, it’s the rewards piece. Okay, great. Bank switching these days. Why would I go and join the bank up there today that has a £175 switch incentive? You do it because usually current accounts are current accounts and current accounts, but there’s an incentive to join and there’s rewards. So we knew we had to solve that piece. And it’s at that moment that we launched the cashback element on our platform that all of a sudden we went from, you know, a couple 10, 20, 30 damage a day into the hundreds per day. And that’s when we realised, ah, we’ve got something here. And we interacted on that to where we are today.

[18:53] Sammie Ellard-King: Yeah, you were the first that I came across. I don’t know if you were the first in the industry, correct me if I’m wrong, but you were the first that I came across that meant that I didn’t have to link uh sorry, I didn’t have to like click a link, like your top top cashbacks or your quid codes. They you’re clicking the link, you’re going through, then you might get the cash back with you guys. I was like, this is linked. So I can forget about it and it’s still happening. And that for me was like a big game changer in looking at cashback in a different way.

[19:21] Luke Ladyman: Yeah, really good point. So there’s actually there’s there’s several ways to earn cashback, but fundamentally, what you’re saying there is completely true. So um Top Cashback and QuickCo use a legacy system um called um cookie tracking. So what you would do basically is to your point, it’s available only for online shopping. You’d click a link in on said platform, go through to the website, and basically that link that you’re going through to the website, it tells the website, the brand, okay, SAMI has come from Quidco with this particular offer. He’s going to complete his order now, and then we can we can link that transaction back to SAMI’s action, um, and we’ll pay cash back based on that. That requires um attribution based on that link itself, which can take six months to a year to pay out. It’s only available online, all that good stuff. There was a new technology created called Card Link CLO Card Link Offers, which is actually where you put your um 16-digit card number into the app. And then what happens is the Visa MasterCard Network actually reports back to the app and says, Oh yes, Sami shopped at this shop, so you can therefore attribute the sale back to you know back to the app because Sami linked it, he clicked through, all that good stuff. Cheddar uses a completely different novel technology, and it’s based on open banking, which is actually attached to your bank account. So what happens is when you join Cheddar, uh, we’re FCA regulated, and we can dive into that in a second, it’s a secure connection. But the way we track is when a transaction is actually um I wouldn’t say uh posted onto the platform is not the best way to put it because it’s completely anonymised, super secure, very trans, um, very super secure, safe, encrypted. Um, but is that transaction that comes through the bank that we then go at SAMI has actually shopped at said retailer, we then to need we need to award the cash back accordingly. Why that’s important is it you can then use it in store, you can use it online. Um and what happens is the brands and the targeting is all based on how you shop. So when the transaction data comes through into our platform, we can actually understand what your likes are and what you don’t like. So you’ll be able to see, do you have a pet based on your transactions? Do you shop at pets at home? If the answer is yes, then actually maybe pet products is for you and will actually surface pet options for you. If you’ve never ordered a takeaway before, then it’s like, well, why do we show you a take uh takeaway offer? Um and it gets to understand, so train line, for example, had you been, you know, going to LNER, um Virgin Trains, there’s loads of operators out there. Well, actually, you take the train a lot, there’s a savings opportunity here. How about train line? So it’s it’s a new technology, and your statement is completely correct. We were the first and are the first ones that use open to open banking technology, which is linked to your account, not to a click or to your card, in order to deliver awards.

[23:38] Sammie Ellard-King: Okay, cool. And I love that. So you’re you’re essentially using smart algorithm technology to surface the right offers based on the individual, so it’s tailored to your spending habits, which essentially is amazing. Because I do find that sometimes on cashback apps. When you’re utilizing and you’re like, where the f do I even start? You know, like there’s so much here, and I don’t necessarily want to shop and service for every single one. Actually, I just want to see, like, oh, cool, these things are available to me and they’re based on me, which is super cool.

[24:09] Luke Ladyman: Exactly that. The offers you get, the rates you get are hyper-personalized to Sami. Um, so when you join the platform, no to offers. Well, they might be the same. Depends if you live a if you’ve got feeding my trainers here.

[24:23] Sammie Ellard-King: Yeah.

[24:23] Luke Ladyman: But exactly that. It’s the beauty of Cheddar, what differentiates us to near enough every platform out there is that there are limitations with card linked offers. So any app we have to enter your card detail in to get rewards. The limitation is that only from that moment forward will they be able to understand who you are and what you like. And also they can only build a profile on you based on what other um brands on that platform. Cheddar has a much wider data set on a particular person. And from that, using AI technology, it can hyperpersonise to exactly your likes, both historically and understanding the present and then moving forward to make sure that the app is personal to you. And that’s reflected in the speed at which we deliver the cashback. Um, and it’s also when it comes to usability, you mentioned the app’s quite slick to use. What subconsciously is happening is that the right offers are being surfaced to you at the right time, um, which again gives that understanding or that sense, I would say, that oh, why is this app just flowing? It’s because actually there’s a reason behind it, understands more about who you are and what actually can help you save. And that’s just beginning. What’s coming next is quite exciting, but I won’t jump ahead too quickly.

[25:39] Sammie Ellard-King: Okay, okay. I also want to just touch on one thing which I think is really, really important when it comes to the open banking model. And I sat in on a talk with the group commercial director of uh Top Cashback and the something I can’t remember exactly the title of the Pasmore Quidgo, and they were discussing real massive issues around tracking. And a lot of people don’t get paid in time because there’s a problem with tracking, and they need to then go and source the information. A lot of disputes happening with cashback on the back end with these kind of click first models. Do you feel like open banking solves that problem? And equally, you’ve mentioned a faster cashback payments option. Is that facilitating that?

[26:23] Luke Ladyman: Yeah, so I think what you mentioned about Quidco and Top Cashback. Um, I’m definitely not going to sit here and bash them at all. They were just the model, just the actual difference is. Yeah, no, absolutely. Yeah, exactly that, exactly that. A lot of people use them, there’s a there’s a there’s a place for them, um, they they’ve served a purpose. You’re completely right, there are challenges in what’s in what’s happening within the industry. So for those who aren’t aware, um the the model upon which that those platforms work, which is cookie tracking, due to privacy to privacy updates on both Apple and Google, that technology is going to become much harder in order to attribute to link it back to a sale moving forward. Um, and that legacy technology has to evolve. So, where open banking solves that to answer your question, is it sits completely outside of any integration with any platform, any need to click any links whatsoever. It’s um in order to become an open banking provider, you have to be authorized by the Financial Conduct Authority. And there’s two ways you can do that. I won’t go into too much depth, but long story short, Cheddar is directly authorized with the Financial Conduct Authority, which enables us to act independently, not through an agent, not through other platforms. We have direct connection with all the banks and we ingest all the transaction data, and it’s through it’s it’s what we call first party data as opposed to third party data. That first party data is you know, the bank has told us this transaction has happened, doesn’t require any cookies, any other third parties. It’s you know, there’s nothing tells you more about somebody than their transaction history. It’s it’s a it’s a it’s a statement of fact. It did happen, if that makes sense. At this place, at that time, it did happen. Hence why they solve crimes using people’s you know credit card details in the past. Not saying this is a crime, but it’s it’s it’s factual. Um, so we are completely removed from that world. It comes with benefits and negatives, is what I would say. Huge benefits is the level of targeting you can do to make it hyper-personalized. And that’s the main thing. It’s not targeting, it’s targeting on a positive spin is that if you have an app, you don’t want to be hit by irrelevant offers. So it’s hyper-targeted to you to make sure you’re getting the personalization that you deserve to ultimately ensure that you can save as much as you possibly can. Um the the downside, I would say, is that the industry is catching up. So the way that the current, a big frustration of some customers is actually, you know, we’ve got some incredible partners on the platform. Do you mention Trainline, Just Eat, that operate within the auto-cashback section? We have another proposition which is instant cashback on gift cards, which I’m I’m sure we’ll come into very shortly. Um, but um the the what’s happening is where we’ve been first to market with this proposition, the industry is catching up. So, what I would say is that this year in 2024, as privacy um the privacy mandates as such policies from Google and Apple kick in, a lot of these platforms, um, a lot of the brands actually that power the platforms and offers will be moving towards open banking technology, which does solve that problem. Um and the key benefits you mentioned to the customer, personalization, the biggest one is is time to pay out. We see the transaction usually within a day, so you can report that back to the brand and pay the cash back out very quickly. Um, it can be as quick as a couple of days. Um, and uh everybody wins. It solves solves a big pain point.

[29:55] Sammie Ellard-King: Yeah, absolutely. And that’s what I loved about you guys. Like, legit, I’m not I’m not, I’m not gonna name names again, but other cashback models, I’ve had to wait months sometimes for the cashback to come through. And with Cheddar, I’ve never had that problem. And it, you know, the max I think was like five, six days I’ve had, I’ve personally have had. And that’s like fantastic to see. Uh, because you know, you want you want your money back and being able to utilize it quick quicker than like a matter of months in some cases. Not it’s not in all cases, but you know, if you made a big, big purchase and it’s like 40, 50 pound cash back and it takes three, four months, you’re like, oh my god, that’s why’s that why does it still not come through? Um, yeah.

[30:36] Luke Ladyman: It’s exactly that. And if you think about what happens when you you use those platforms, you have to go onto the platform, log in, search the offer, click the offer, click through to the website, you have to make a payment. It it’s a pain in the back side. Where Cheddar comes into it is there’s two types of offerings we actually have on the platform. Because there’s also two sides to open banking. There’s the account information side, which is information that’s shared securely to us, which enables us to deliver value. So actually, by linking your bank account, you’re doing a few things. You’re confirming your identity. So actually, to join Cheddar takes, as you probably remember, it takes less than a minute. There’s no need to upload driving license, passports. We actually work with the banks, confirming your name and identity with with said bank. So when you sign up, it’s it’s super slick, super quick. We confirm your sort code account number. So when it comes to paying you out, Cheddar doesn’t do points, it’s actual cash that you can redeem. So one button, oh, redeem the monies instantaneously into your bank account. And that account information also is transaction information. So when the transactions come in, it’s used one to validate that you made a cashback purchase using our auto-cashback solution. Um, but the other one is the targeting or the personalization. I actually prefer that word because it’s to personalise what offers you receive based on your history. The other side to um open banking is what’s called payment initiation. Um, what the consumer will see is pay by bank. And what pay by bank is, is the next wave of payment innovation. So when you use your card, um both your debit card and credit card, to keep it short, visa master cards, we’ve done a fantastic job by the way, um, in creating this global network of payment terminals. When you tap it, it goes through multiple processes, networks to confirm the payment. Money moves from your account to a merchant acquiring account, then to the brand, so on and so forth. That whole process costs the brand about 2%.

[32:28] Sammie Ellard-King: Yeah.

[32:29] Luke Ladyman: So if you make a £100 purchase, the brand only gets about 98 pounds of that. The other side to open bank is payment initiations. Actually, if you pay by bank transact transaction, it’s basically a bank transfer from your account to the brand’s account. And when you buy, which is the next product I’d love to bring up on this one, is an instant cashback solution, which is where you earn cash back on the spot using something called our cashback gift cards. When you make a transaction using using pay by bank, it’s instantaneous. And it’s basically a free transaction because you’re just doing a bank transfer and with the benefits as you would using card, um, debit card or credit card in that regard.

[33:07] Sammie Ellard-King: Um is there any limit of blockchain technology within that? Because that’s incredible to hear. Because yeah, I like I remember back in the day we were running hospitality businesses, putting multi-millions of pounds through bars a year, sometimes up to sort of two, three percent with world pay, or whoever the provider was that we were with at the time. And that, you know, that at the end of the year, it’s hundreds of thousands of pounds that you’re paying these providers. So those kind of savings for businesses are enormous.

[33:35] Luke Ladyman: It is, and actually, um, to those listening on this call that have you know have a side hustle or have a you know get paid in somewhere using PayPal, you can probably relate to it on that, which is yeah, you know, you can accept money through PayPal, be it PayPal to PayPal transaction, or even stripe exactly that. Um, that you the fees are quite high. So actually, on Cheddar, you can actually send a payment request out using Cheller. There’s a big button in the middle of our logo, you tap the button, um, you can send a payment request, and anybody can pay you. They don’t have to be on the platform, they can click your link and they can pay Sammie however much money they owe you. Um and that’s the same technology that powers our gift card purchases. Answering your question, is it blockchain technology? Um, some members of the team love crypto and they’d love me to say yes, but unfortunately, no, it it’s it’s really as simple as what we do is we tee up, for want of a better phrase, the bank transfer. So if I’m gonna pay you using Cheddar, what Cheddar does is it again through a secure connection with the bank, it basically says, right, Luke, Sammie’s requested money. We’ve here’s a sort code, here’s his account number, we’ve confirmed his name, there’s the amount. Do you agree with this transaction?

[34:46] Sammie Ellard-King: Okay.

[34:46] Luke Ladyman: You check the details, you just hit pay, and it’s literally just a faster payment, a bank transfer from me to you.

[34:52] Sammie Ellard-King: Just a closed connection, basically, isn’t it?

[34:55] Luke Ladyman: Closed connection, secure payment that just goes in the same way that I would probably go into a banking account and I have to put your sort code account number. Yeah. That transfer for you. Um, no blockchain technology involved whatsoever. It’s just the traditional bank transfer.

[35:13] Sammie Ellard-King: Is that kind of similar to when I do like a payit, for example, when I’m using pay it to connect to my bank via when I want to pay my credit card off at the end of the month, for example, when I use pay it and it connects and it’s instantaneous?

[35:25] Luke Ladyman: I’ve personally not used pay it, but I know of pay it. So I assume it’s very similar. So yes, if you where it connects your bank account, if pay it is a solution whereby you um you I link to your bank account and it tees up the reference with a sort code. Is that what it does? Okay.

[35:41] Sammie Ellard-King: Yeah.

[35:42] Luke Ladyman: Then yeah, I I I can always guarantee that they’re using um open banking technology, which is just that, just teeing up the the payment so you don’t you don’t get the reference wrong, or it’s just a one-tap, one tap solution.

[35:52] Sammie Ellard-King: It’s just better for the customer, isn’t it? All round, like you’re offering solutions, which we’re I’m sure we’re going to touch on now. But yeah, I love the fact that you’re just you this is why immediately I knew you guys were gonna be consistently innovating, and like that’s why I gravitated to you guys. And it’s just amazing to hear like you’re utilizing technology in the best way, but you’re putting the customer first with these things as well. Whereas, you know, you could have done it to make a couple of extra percent here or there in the back end, but now you’re giving it to the customer.

[36:22] Luke Ladyman: And that’s exactly that. The world is catching up, even HMRC for tax payments, for example, are now using payment initiation because they appreciate the savings, um, uh using um a platform called EcoSpend. But it all comes fundamentally to what we believe in Cheddar is what you see today is a platform that truly is customer first. And it’s not the end product, we’ve got a lot of things coming in the pipeline. Um, our instant cashback solution that we launched um, I think six months ago is a good example of a yeah, absolutely. So um a few so the auto cashback solution we’ve touched upon in the payments, a few pain points that we wanted to solve is that even with the auto cashback solution, the cashback rates weren’t as juicy as customers wanted.

[37:10] Sammie Ellard-King: Yeah.

[37:10] Luke Ladyman: The cashback, although it was quick, you meant you referenced six or seven days earlier. A lot of customers wanted the cashback instantly, and also a deeper breadth of um of brands available and was a huge request from said customers. So we embarked on last year was to create an instant cashback solution that harnessed the power of open banking. So what we’ve now created is a a platform that has personalized gift card offers. Now, I think when people think about gift cards, they think about oh, it’s Sammie’s birthday, I owe him a gift card.

[37:47] Sammie Ellard-King: Yeah.

[37:48] Luke Ladyman: Now, traditionally the answer is yes, that’s what gift cards were, but they’ve evolved significantly. So, what a gift card basically is, is just a card that you could gift yourself or somebody else. It’s just a basic preloaded card that you can buy on the Cheddar platform, use and pay by bank. So again, it it switches to your bank to confirm the amount, and the money is actually sent to Cheddar instantaneously, which enables us to issue the gift card instantaneously. And that gift card owns you cash back on the spot. So you could have, for example, a £100 um Tesco gift card, and if there’s 3% cash back, you get the three pounds there and then. The minute you press pay and it goes through, you get three pounds into a Cheddar account. If you then hit redeem, it goes back in your bank account. And those gift cards can be used in store. Um, some in store, some online. These do check the T’s and C’s of each of each offer. But that was solving pain points to the customer that they needed the immediacy of payment. Um, and it’s a range of products, uh, range of brands you can use those at. Um, what is important for us is the average um the average income of people on our app is 33,000 pounds a year. And if you look at the cost of living crisis right now, um a lot of our users live in London, cities, irrelevant where you live, 33,000 pounds a year is a salary that you need to be conscious where you spend and every little help. I was there, that that was me at 21. That’s basically exactly my salary. So I know exactly our core audience, our core user group. I know exactly the pain points day to day. So we have cash back um through this gift card solution um is a sexier way of earning cash back, more convenient way of earning cash back that can help you save up to 10% on your daily expenses.

[39:33] Sammie Ellard-King: What I really like is how you framed the new use of gift cards, because that’s what I’m getting myself into now. It’s just those little extra steps of taking to find those little savings. We’re here and there. And as we get into the cost of living, you know, I did a video the other week, 68% from 2020 to 24 on an average single person’s food shop, then you put family into that equation, that number is enormous. So if you can save or bring yourself back three, four, or five percent utilizing apps like this, yes, it’s not the 68% back in your pocket, and unfortunately, wages haven’t grown that much in that time, but it’s something. And so getting something back on money that you’re already spending just by taking the steps, and it’s so easy. Having personally used it, we literally did it while we were in the queue for the checkout, processed the payment, bang, it came up. They scanned the QR code, and that was it. We were done.

[40:37] Luke Ladyman: Like it it really is that simple, and you mentioned earlier um around sort of being 10% ahead. We’ve made some decisions in Cheddar that have put us into that position that SAMI can be in a queue and find it that easy. So, for example, being there, not many brands or not many um platforms are actually directly um authorized by the FCA. So by being directly authorized by the FCA, it means that we handle all the data securely. It’s not going through third parties. It means that when you make a payment, we’re processing that payment, which saves seconds at checkout. But every second helps in that regard. Um, it means that we we own the customer journey, um, where the gift cards are stored, how they’re presented. Every decision we’ve made has been geared up to Sammie getting to the front of a queue, tap in the amount, hit in pay, and the gift card come into life. Yeah um and there’s a lot more coming in the future, which I can’t talk too much about, but it’s it’s only going to get much, much easier. But you’re completely right. If you think about the legacy of having to go onto um, you know, onto his websites, click through. We’ve reduced the step significantly. Yes, it still takes 10 seconds to spin up a gift card. By the time you go, I’m gonna buy a gift card at MS, Asda, Sainsbury’s, Tesco, they’re all on the platform. You open the app, you enter the amount, you press pay, it jumps to your banking app. Do you confirm these details are correct? Yes, comes back to Cheddar within five seconds, the gift card’s there, and you just scan it with a cashier or self-serve. And to your point, it’s the incremental gains, Up The Gains. It’s the incremental gains that you know three or four percent of all your spend compounded over weeks, months, a year really add up so that when you are getting to it’s Christmas and you’re thinking I’ve got to buy these presents, or that that boiler breaks, or something happens, you have that £100 a month that you’ve saved. It could be £20, could be £100, could be we had someone who bought a £3,000 TV the other day, and their cashback was this is a good one, £127 they saved just by getting some Curry’s gift cards. Um that’s cashback that’s there. It’s it’s if you’re gonna buy anywhere, just just just use the gift cards. It’s it’s a uh for 10 seconds you’re you’re you’re gaining, you know.

[42:53] Sammie Ellard-King: It’s just that extra step at the till, wasn’t it, now? Or while you’re walking around, yeah, we’re gonna buy that. Okay, it’s £410, or it’s uh it’s £50, it’s £20, whatever it is. Cool. Buy the diff card, get the cash back, show that a till. And it’s like literally that simple. So whereas you’re taking your wallet out to get your card out, if you just do the opposite and get your phone out and buy the gift card and move it through that way, you’re gonna make money back on the money that you’re already spending.

[43:22] Luke Ladyman: Such a very good way to put it, actually. Um taking your wallet out, getting a card, pin code, you’re right. It’s probably if you think about the the net gain, you’re probably losing five seconds, but then you’re getting five percent back in your pocket. So I suppose it’s it’s how much effort do you want to put in for the rewards?

[43:38] Sammie Ellard-King: If you make that a time evaluation, which I love doing, that’s some serious cash. Like you for five seconds.

[43:46] Luke Ladyman: Absolutely is. You think about what wages are these days, you know, in order to get four percent back, like for the seconds as what you get back, it’s it’s a lot of money. Yeah, if you’re doing your food shop, the average um gift card purchase for groceries with us sits at 45 pounds.

[44:02] Sammie Ellard-King: Okay.

[44:02] Luke Ladyman: Um, so if you’re doing 45 pounds, that 4%, you know, 52 times a week, sorry, 52 times a year, it adds up to a significant amount of cash calendar the year.

[44:13] Sammie Ellard-King: It’s flights, it’s holidays, it’s it’s Christmas covered, which is what I do. I keep everything separate. I’m actually going to level that up now because interestingly, I was chatting to Chloe and she was like, no, take it out every month and then put it into a high interest account in a in a monzo pot or wherever you want to put it. And then I was like, okay, that’s actually better because I usually just leave it and then on December I take it out. And like that was how I how I did it. And like just having that money there, knowing it’s working for you, or knowing it’s at least there, I always just try, say, compartmentalize it. But even if you don’t want to, even if you want to just put it back into your monthly spending routine, it’s it’s there, which is just such a great thing.

[44:52] Luke Ladyman: And that’s actually really, really good advice from Chloe. What I would say is give them the golden ticket. You know, Luke, you’ve got your Wonka factory, you can make whatever you want. How would you how would you create the perfect Cheddar app? Yes, it actually would be amazing to put that cash back to work. Um, I would love to have in the app today a high interest savings account. I we’d love all these things. We’d love to have stocks and shares and like to to um put it into places that would help not just save but grow your money. Um as you can imagine, building an app takes um there’s a lot of regulation involved. Cheddar is customer first and rather than leveraging other people’s licenses, we always want to make sure that we we could we own the customer experience, control um, um store the data securely. So everything we build and own is is is is in house the best way to put it. The app build, everything is in house. So we don’t just want to rush into things and launch stuff just because. So those types of advice I’ve taken out, put it into Pots put into savings, whatnot. Not financial advice, of course, but those are fantastic uses of money. A recent actual um we were featured on a um a TV show recently, and mentioned on there is actually one-third of adults have little or no savings in the UK, um, live paycheck to paycheck. And of all adults in the UK, 41% want to save, but physically have no way of saving. Well, that means is they live um you know month to month. There is no money left over. So actually, within our database, our user base recently, it showed that 51% actually spend more than they earn each month as cost of living is increasing. And this is where Cheddar comes into it, is exactly there, is actually where there’s 41% where the you know the third of people with no savings, Cheddar gives you that opportunity to save that, you know, be it from Amazon 1.25%, be it Tesco 3%, be MS type, it doesn’t matter. Like that’s where you’re seeing those savings, and that’s where you can actually create your little your little pot, your nest day, and start somewhere. Something’s better than nothing. Think of the Private Jet Brokerage website, you know, it’s it’s it’s where do you start? Do something small, learn that, put it aside, and it will grow into something bigger in the future, which comes up quite nicely to what Cheddar’s actually bringing out in the future, which is launching very soon will be a solution that will help you proactively safe. So touching upon the information we have on the transaction data of customers, where a lot of budgeting apps these days are reactive. And what I mean by that, Sammie, is hey, last month you spent this. Okay. Last year you spent this. Okay. What chair’s going to be using is actually the transactional data in AI to actually say, hey, Sammie, last month, last quarter, on average, you spend this amount. We’ve identified that we can actually save you 5% if you do this action. So that could be in context of this discussion, it could be we’ve identified that you actually spend, you know, X amount at Tesco. I keep referencing Tesco, by the way. It’s it’s you know, it’s a very popular gift card, but there are obviously, you know, Tesco, Asda, Morrison’s. Groceries are the highest um groceries are the highest grossing gift cards on the cello platform. There you go. Uh that’s a tongue twister. So I referenced that because something we all have to do, right? It’s it’s it’s yes, we have fashion, this and that, but we all need to eat. It’s it’s it’s important, and the cost of food is going through the roof. But it will say, you know, if you just press this one button here, we can spin you up and it’s in cashback gift cards, and actually you will save this amount. And that smart savings, the AI coupled with open banking, is what’s coming next, helping you proactively save and forecast in the future actually by doing this one action. Yes, it’s only 68 pence today, but if you repeat that action consistently, it will grow to this. Um, and that’s what’s coming very soon.

[48:58] Sammie Ellard-King: And that’s like one retailer as well. You’re like factoring in everything else, which is on the app, the travel, the delivery, the eating out, there’s so much on there that just the coffees and like for me, that’s where you guys are just really you are like helping the people, which is wicked. And I know some, you know, you’re working on some very exciting things. You mentioned some of them there, and you can just see it constant innovation. I feel like if people can get onto Cheddar now, sign up, get on board with it. The things that are coming are just super exciting. You know, you you’ve mentioned some of them there. So get to grips with it now and you know, start earning some cash back immediately on some of the money you’re already spending. And yeah, it’s the future’s bright.

[49:44] Luke Ladyman: Yeah, and that’s the main thing. And it’s the innovation. So um, like we will we will always continue to innovate for customer. It’s as simple as that. Um, you might it sound like we can’t move as fast as we want to because there’s a lot of things that require a build, partnerships, relationships, um, and it can maybe a bit frustrating for customers. You know, again, as we mentioned in a minute, I’d love to have savings accounts for people, and I’d love to have all the brands on the planet on the platform. Um, whilst we’re growing, we mentioned you know, crossing the 100,000 active user mark. Um, if we had 100 million customers today, or there’s only you know 52 million million eligible customers in the UK, if we had all 52 million adults in the UK on the platform, our purchasing power together would put us in a position where we would have every single brand under the sun on the platform. So, of course, a founder, I’m going to say, download Cheddar. Yeah, exactly that. But genuinely, the more the customers use the platform, the more they feed back to us, the more we iterate, the more we grow, the more actually we can give back. Call it Robin Hood or whatnot, but like the more we can actually give back to you. It is in a way, yeah. It it really is. And I look at that 21-year-old Luke, not to sort of be about me, me, me, but everyone out there has that that that child within them or adult, we’ve all been in difficult situations, which is our intentions are pure. We want to help that vulnerable person, the vulnerable people, the 21-year-old Luke. And even if you’re not vulnerable, even if you just want to save, that that’s money there to be saved. So, my sort of call to action is give Cheddar a try. If you don’t like it, email me personally, and I will take your feedback on board and really look to make the app better for everybody. And if you love it, leave us a review. And when you leave your review, every single review that’s left, we we we genuinely um we genuinely read them all. The the award we won recently was due to a um due to the customer scores that we got back, which is why we sort of trumped like the Chase Bank Best Newcomer 2024, the British Bank Awards. Um, every single review, every user means the world to us. So please you know join the community. And if we can help you save more, then then we’ve done our we’ve done our part.

[51:54] Sammie Ellard-King: Amazing, man. I’ve really loved this. It’s been like proper deep dive and yeah, got got geeky on on how it’s creating, how it’s created, and what’s coming up. So yeah, I’ve really loved this, man. Um thank you so much. And um, yeah, look forward to what’s coming out and you keep keep your eyes on the prizes, they say, I suppose, with with you guys. There’s lots coming.

[52:16] Luke Ladyman: Yeah, no, uh, and on Cheddar, Sammie, thanks for having us on this podcast. It’s um it’s it’s a a platform for us to speak, platform to be heard. Um, and honestly, I I love what you’re doing. It’s very real, it’s very sincere, it’s very honest. It’s not fake, it’s not stage. These sort of conversations need to be had. So, yeah, no, I really, really, really appreciate the invite. Thank you so much.