Affirm CEO Max Levchin Says American Consumers are Healthy

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1:59They jumped as much as 17 % in trading to the highest intraday going back to September of 2025. This is after the fintech company forecast revenue for the first quarter that beat the average analyst estimate. estimate. Shares now higher by about 2.4%, so giving up some of those gains. Separately, the company and Shopify expanded their global partnership to launch ShopPay installments in Australia. We got with us Max Levchin. He's the CEO of Affirm. He joins us from our San Francisco Bureau. Max, welcome back to Bloomberg Businessweek Daily. Always good to see you. We're going to get to the results, but before that, I want to talk about the consumer because you have this great real-time view using what many people would argue is crucial alternative data to understand the view of the consumer.

2:42How would you describe the American consumer right now? You know, I think the affirmed consumer, the ones we interact with all the time and see is healthy. They are paying us back on time. They are shopping. They are taking advantage of the 0 % deals that we have to offer them. So all those things are still going swimmingly. I think it's impossible to ignore that gas prices are elevated for them, just like anyone else. I think inflation, as you just heard chairman of the Federal Reserve tell us, is still stubbornly sticking above its target. I think they are stretching their budgets when they need to do it.

3:15And frankly, that actually accretes to the demand for a firm. So in some ways, we are asked by our consumers to step up to the plate and help them manage their family budgets more often in the current environment. But by and large, they are healthy. But what are they buying? Are they buying these high expensive items or are they using this program to buy things like, you know, to pay for utility bills, to do things like that? What are they buying and what are they using it for? Again, in our portfolio, by far, we are called upon to finance homewares, sporting equipment. There's a lot of back to school expenses that families incur right now.

3:51So everybody's buying something for their kids if those are going back to school. So that's the bread and butter of a firm that has been for a very long time. Generally speaking, we are not huge fans of financing recurrent transactions and take steps to make sure our consumers don't give themselves false sense of security by stretching something that is a subscription into a longer subscription. That's not a financially healthy decision. As you know, we don't charge late fees specifically so we can align ourselves with our borrowers. When they borrow without a clear plan to pay us back, we will just lose money.

4:21And so we routinely orient our models to decline applications for loans that imply pushing off of the financial responsibility. We love our consumers to be financially responsible. We are here to help them be so. Are you noticing any changes in the rate of declines when somebody is applying to use a firm? The rate of decline is something that we set. In fact, if you sort of wanted to do a super short crash course on how a firm works, we set an acceptable loss rate for us given macroeconomic signals that we get to see. That dictates the rate of approval, rate of decline as a function, of course, of the credit quality.

4:57So it doesn't change based on the individual who is applying for it? It absolutely changes. What I'm saying is that we work backwards from the question you posed. We decide what our acceptable loss rate will look like, and that in turn sets or dictates what the approval rates will be. If you want to sort of take a very macro view of our position relative to the credit application set that we see every day, we're probably slightly more restrictive than we were this time last year. But again, nothing dramatic. So how do you compare to the competition out there? There's Klarna, there's other ways.

5:30There's traditional credit cards as well. I mean, what sets you apart from that? Well, first of all, I think our results do set us apart. I don't want to throw shade at anyone, but I think we've grown 30 plus percent for the last 11 quarters of memory serves. And for 12 months, we've been consistently profitable and many other accolades. And we may be the only ones in the space that have been able to print these consistent results while growing really quickly while remaining profitable. So at least we are a really well managed company, I would argue. In terms of why merchants and consumers choose us much more frequently, I would argue, than our competitors, twofold.

6:09One, we, in fact, add a lot of volume to our merchant partners while always making them look great. We don't charge late fees. We don't compound interest. We don't defer interest. We are extremely transparent to our borrowers what the cost will be, and we reward them for paying on time and even paying early, which is quite different from traditional financial services. So merchants love us because we make them look great while making them more affordable. Consumers love us because we are so transparent, because we create pockets of access to credit for them in a way that isn't just transparent.

6:39It's also responsible and they know it. We make it our business to make sure they understand that when we tell them no, it's not because we're finicky, but because we genuinely believe it's a bad idea for them to borrow more than they can afford to pay back. And most of them really appreciate that. And so I think we're quite different. We're a different breed. and the DNA of the company is in underwriting and precision and transparency and, frankly, quality. So that's what's driven our success in this market and beyond. Perhaps one way you could differentiate from the competition would be to get a bank charter.

7:08You applied for a bank charter earlier this year. Can you give us the status of that application? It's in process. It's exactly the sort of thing that you're not done until you are. It's a very, very rigorous process that the regulators make sure you have to go through without any shortcuts. and we certainly appreciate that. So it can't tell you very much about the state of the process, other it is ongoing, but it's a thing that we don't require to operate, but we certainly would absolutely welcome being members of that particular club. It certainly helps clarify our exact regulatory status and over time it will feed into our cost of funds as bank of a firm should it be granted over time becomes a source of funding for our loan portfolio.

7:50So if you don't get it, It's fine? Yeah, but we certainly hope to get it. Okay. Do you think you will get it? I think I will report back if and when we do. Fair enough. You're trying, Tim. You're trying. I love it. I love it. We're all do our jobs. Yes, exactly. Max, I got to say, the company has been doing very well with e-commerce. What's your strategy for in-store spending? I'm a huge believer in the relevance of a firm in-store. It's actually something that I am personally very focused on. We just announced this for a very minor reorg, but allowing me personally to spend more time inside our innovation lab called ZT1, zero to one.

8:32And one of the many projects we're working on is making a firm in store even better than we've been online. Online we add 30 % more volume through better conversion through access to credit to consumers. Offline, we do more or less the same, but the participation in the offline world for us right now is quite de minimis other than our Affirm card. So we're going to invest heavily in making the card even better, even more rewarding. But we also have some really clever ideas on how to make the in-store experience just a standout great thing. I don't want to front run anything, but if you can't tell, I'm very excited about what we're going to do in-store.

9:04So watch this space. Ask me again in a quarter and I'll show some real results, I think. Well, are you also excited about, I think it was last September, you allowed users to put the card on Apple Pay. How is that coming along? It's great. We love all of our digital wallet partners. It's just another way of bringing Affirm with you in store. We're seeing really healthy growth, not just through the plastic taps and swipes, but also through digital wallets, online and offline, but offline in particular is just such a big unlock. And so we're doing really well there and quite excited to do more. Max Levchin.

9:36Max, always good to check in with you. Max is the CEO of Affirm, and he joins us from our San Francisco Bureau.

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