Well, you might remember yesterday we talked a little bit about Jamie Diamond of JP Morgan his annual shareholder letter. He waited on a lot of things, including how he's keeping an eye on fintech startups and perhaps maybe one of those firms is one like our next guest. We're talking about a firm, and let's bring in the founder and ce of a firm to get a feel of what they are up to, what's going on with consumers
and digital commerce. Great to have back with us as Max Levchin, he's co founder PayPal, he is founder and CEO slide that was sold to Google, chairman of Yelp for many years, and he joins us on the phone in Hawaii, and it's great to have you back. How are you. Thank you for hearing me. Um, I'm doing well, spring break, I'm working, but thank kids are really enjoyed
this one. I bet I bet no. I know it does feel like well you tell me, Max, I feel like there's a lot of areas we can go, but first of all, your company, Uh, it's really unique in that you do get a window into what's going on with consumers. It does feel like the world is reopening I'm seeing more activity. I've gotten one vaccine. I know a lot of people in my orbit have all of a sudden in the last few weeks gotten vaccines. It feels like things are opening up. How do you see
it and what's going on with consumers? I think the you know, I think your your your your sense for this primed to get back to hopefully normal or semblance there off is really spot on. We're seeing this in our idea obviously tracking every machinable metric. What is the curve of recovering going to look like? From my point of view, the most important thing I care about is
the health of the consumer. On the financial side of things, and we've seen and too much thanks to the action by Final Reserve and government in various places, there's just a tremendous amount of where we consider it to be good consumer behavior. There's a lot of savings and this is to me that means people are saving up to really go out and have a wonderful vacation that they've
helped back on. And you know, we're seeing conversations with our partners places like Verba and Pacasa, etcetera, um on the sort of overall health from the death in comboration side of things. Americans have paid off most three billion dollars in debts during the pandemic, so they put some of those stimulust checks to again, from my point of view,
the right the right thing to do. Uh. And then just the overall consumer confidence is really high and jumped to one year high, which is maybe maybe from a low point of a year ago. We weren't really taking these log downs seriously, and at this point I think people have you know, they've suffered and they're really looking forward to really well, let me ask you something that is your company, you know, offers installment plans right to online shoppers, um, and lets people kind of pay over time.
Are you seeing less of that because people are using more of whether it's stimulus dollars or just you know, savings in general, to pay down their debt. Can you make any kind of conclusions along those lines, Um, you don't. We have seen exceptional growth in the last year, and so I would not characterize it as seeing less. I
do think that people are using their similar dollars. Sensibly, we have a staving feature that we offered to our customers, and we've seen influx of staying increases as the government sent checks to consumers, and so I think that there's a sort of very visible correlation there. Uh. I think it's really interesting about the effect of the pandemic and a long term state of e commerce and just shopping in general, is we've trained a whole generation of people
that we're just not going to go online. Folks like my mom, who is in her seventies, who enjoys her offline shopping. It's you know, she's now very well versed in the idea of boxes coming to her door. And so we brought in a bunch of e commerce shoppers,
and I think they're here to stay. And I think what's really going to be required of us in the binoculator industry and broadly specard providers and payments, we have to meet this new consumer behavior with buy online and pick up and store or return in store, exchange in store. They're all the mixed omni channel modalities that are suddenly going to be much more common, much more important. Yeah,
I have to say too. In retail, I mean I look for places where there's lots of ease I can if I buy online, can I easily return it either through their taking care of it, or they're taking care of shipping, or I can drop it off at one of their storefronts. And you know, we've talked about omni channel for a long time, but I think now I totally get it of what it really needs to be. In order for it to be incredibly productive. You have to be met where you want to be met, especially
as we're still for coming back to it's safe. Yes, maybe I have my half vac scene or how safe am I? I don't really want to go hand around and big showroom. But if I buy online and I need to get rid of it, it has to be very quick. I don't want to repackage it and you know, to get to the post office, I need to bring it back to the door. Stuff. Yeah, So I think
that's that's that's a big important change. So when you talk or you see what's going on in terms of spending, because you help folks whether they're buying, you know, a peloton or they're traveling or buying stuff at Williams Sonoma, what is it where do you see people spending the most money? At this point, Max, you know, we were so diverse in our merchant coverage. It's almost uh, you know, we aren't we seeing this most interesting area that we're
seeing growth and right now is of course travel. But I think that's that's almost a fat a company at this point. They're all these people who are just dying to get out of their four walls by anything necessary. The other areas are just gonna any totally really funny but makes total offense. But I was sort of shocked and then not shopped at weddings, you know, unbelievable influx of demand for wedding everything. Do you if you pumped it or postponed or fell in love during you're gonna
get married and you're gonna have a big party. But where we're seeing a lot of that. I have to say, I think I know three or four people in my orbit. You know, I had tried to schedule a wedding several times um over the last year, and I had to keep you postponing it or people who got married but said, listen, we're going to do a party as soon as things open up. So a lot of that's going on. Tell me about your company here, you are nine years in
three months roughly since you I p oed um. I mentioned I was trying to find my notes on those stock prices up about for since that January, I p O, you know, how is your company change and evolved along with what consumers need or what the market needs know it? So it's it's actually a very rewording moment. It just literally happened. I was on PI day market our birthday, and you know, on the one hand, everything has changed. You nine years ago, ide bioppulator just wasn't the thing.
People believe it. They cards are fine, and I had this sort of very strongly word a point of view that the credits is broken. We need to provide a more flexible mparent alternative because not want to be confused by their just great. They want that exactly when and how they will get out of pain, their their their their payments. And so we made this mission to create financial products that improve lives and at a state exactly
the same. And it's really awesome to just to be able to look back and get we've been doing the same exact thing while evolving and changing everything for nine years straight, and it feels like we're probably five percentage percentage what we were trying to accomplish. So it's it's one of these things. But it's the longest project I've heard done in my entire life starting companies in college and I have no interest in slowing down or got for both pausing, So it's really fun. Well where do
you want to take it? I mean, you've introduced the affirm card. Um you know, tell us about you know, how you're thinking about things, how you grow the business obviously because you are a business, but how do you know continue to kind of innovate and think about the services that are needed. Right now, the opportunity is just almost overwhelming. So obviously we're gonna stay true to our mission,
will be transparent and be honest. We won't charge you lead people want charge you an it's easy, don't expect um. But there's lots of different lectures and we're trying to pursue them all as much as as much as we can so that the card is obviously you have a fundamental products for us because it we think it gives us permission to be in your everyday financial life. Up until now, every by malpulator provider is something that you encounter at the point of sale. You may learn about
it then or not. This is a product that we expect to deliver to our customers and say hey you can have this bet are more transparent or honest way to transact with you every single day in your wallety digital Laalan or a physical one. And so that that's something that we just expected to spend lots and lots of side doesn't really really be you very really excited
about this project. We have just a crazy number of really amazing platform integrations that we're either launching or contemplating on ful buildings and Shopify some thing that we announced, uh, you know, half a year or something like that. But it's something that's with reason building out and we see more opportunities to come in and help folks that serve merchants just provide more transparent and better financial products to
their shoppers. Shoppers with the underlying merchants, and they're just a huge number of merchant services that we can bring to the markets to help our merchant partners do smarter, better things for their customers. So it's it's want to be saying no matter how fast I talked, I will barely touch on the ant opportunity. Well, listen, you know, if you check out what you guys are doing, I mean no late fees, no prepayment fees, no annual fees,
and no fees to open or close your account. Um, I'm looking at your website, but I you know, it was reminded of kind of your strategy. UM. Remind first of all, it makes me wonder why wouldn't anybody or just everybody just do it this way versus traditional cards. I'm not trying to be a commercial for you, but I mean, first of all, how do you remind our audio?
It's how you're making money. So about half of our transactions are both interest free, and all the fees that you you're at up, you know they never apply, have never applied. One of my favorite stat about a firm is zero dollars and zero sense of he's charged ever, And so that that that's a really good way I'm
judging us and who we are. UM, so you know, there are two sources of income for us, precisely, and merchants pay us a little bit or processing these transactions for them, and we bring to them and exchanges typically very significant increase in conversion as well as average order value. So folks that are on defense about buying something that's expensive, maybe just a little uncomfortable doing against their checking account.
Well will help them split it into anything as as quickly as six weeks to as long as four years, and so that that that's convenience with the knowledge that there will be no incremental interests penalties of any kind. It's a very powerful driver of conversion and increase spend, and so merchants are happy to pay for that. Typically
are this is win win relationship. There Uh, in some situations, the merchants would like us to charge consumers interest, and we do in about half the time or I think a little bit less and half time obviously fluctuates depending on our merchant base, consumers staying no interest at all,
and in some situations actually really really cool. We have these magical moments where consumers pay no interest at all and the piece of course, and the merchants pay precious little because it's the manufacturer that wants to subsidize the transaction, and so they step in to help us deliver this amazing, amazing saving for consumers would do the gameor time, but it's cost them nothing about the sticker price, while the merchant just looks to sale. And so we see those
models taking significant root in the industry as well. All right, I'm gonna end on a lighter note. Just got about thirty seconds how many Pelotons were going through your network during the past. Think I'm allowed to say that anymore. I can tell you that I think we're officially up to a full Pelton device family. So so, in other words, in your own household, there was a lot going on. Um, great stuff, Max, Thank you so much. We I always
loved talking with you. I really appreciated good luck and congratulations on nine years, and look forward to checking back with you soon in the future. Max Leftkin He is CEO, chief executive officer, founder of a firm, co founder of PayPal uh. He was also CTEO of that company and chairman of Yell for about eleven years from its founding days. So just great to check in with him.