There's one stock that's really been moving over the past ten days that we're keeping an eye on, a firm around fifteen percent higher over that time frame. It's the highest it's been since February. And Affirm this week announcing that US Apple Pay users can buy now and pay later for as low as zero percent APR. The new agreement will allow users checking out online or in app with Apple Pay on iPhones and their iPad to be
able to pay over time with Affirm. And we are joined by none other than a firm's co founder and CEO, Max Levchin. How does this change the game for you, because obviously a lot of users use Apple Pay. Apple's own entry into financial services has been a massive wonder of the industry, to say the least, But now the addition of buying now paying later through a firm, what is the expectation here?
It was just really exciting.
It's first and foremost, it's unbelievably great to have direct integration into a really best in my biased opinion, I'm sure digital wallet out there super early days. We've been lived for three days, so you know, don't ask me for results just yet. But the actual implementation is wonderful, and so I'm very excited about the possibilities here. Obviously, it's going to be great for consumers that love their digital wallet, but it's also going to be amazing for retailers.
It's just in time for the holidays.
You'll be able to use your Apple Pay affirm integration to buy gifts, to affirm all the things you need to have for your loved ones, et cetera.
So just just really excited about the possibilities.
It's interesting you and I are old enough to remember years ago when I was bothering you left and right about what it would mean for Apple to get into buy now, Pay Later, and now they're partnering with you. There was a time where people would worry about whether that would create a significant competitive force. The way the landscape is shaking out is through partnership and massive way
with the giant tech companies. How do you expect that to continue to extend because it seems like a pretty massive change from what we saw a few years ago.
It's still a very young industry and partnering well is what we have become known for.
You know, we count the largest.
Retailers, the largest platforms, some of the best known brands in the world among our partners, and it's always for the same very basic set of reasons. We treat both sides of the customer ecosystem right.
We don't charge lead fees, we don't hurt our consumers.
We're very careful to say yes and know when we don't believe someone will pay us back.
And we really deliver value for retailers.
We increase their average sales, we help them drive conversion at the point of sale. And so those two things combined make us data deal partner. And you know, it helps to be built by very serious computer scientists, which means that we can scale with volume. The spikes you see during Black Friday and the holiday season are pretty significant technical challenges and we're just very very good at it, and so that's why we're picked by the best brands out there to be partnered with.
Another aspect of this is you have seen some of the retailers you work with. Some have had some knockout numbers in the last couple of months, but others have really faced weaknesses in the consumer And if you think about the path forward here with that interest rate cut, how does that really change the game? Do you expect consumers to still be this bifurcated in the market. Do you still expect significant weaknesses until we see a much more significant level of cuts.
It quite good to predict macroeconomic events as as well as that I probably would have a very different job. But a firm consumer is buying and shopping. We've just reported numbers a couple of weeks ago. They look very strong. We are forecasting a really great growth going forward in this fiscal year.
So cautiously optimistic.
US consumer is shopping, they're buying, they're paying their bills with a firm and so that seems to be going well. The FED lowering the interest rate obviously among other things, suggest the FED is worried about too much of a slowdown and that their war on inflation has now been bla blah one. So you know, I'm in a cautious posture relative to US consumer. That said, we're seeing great demand.
What are you expecting for the holiday season? You were talking about that a little bit before. You were talking about how you expect people to pay for their holiday shopping on Apple pay who if you guys, among other things. What do you think will happen this holiday season? Relative to years past from what you know.
This being an easy prediction to make, but I'm relatively sure this holiday season will be the greatest number of people affirming their gifts ever.
That's my prediction for our business. I do expect there.
To be a significant amount of AI curated gift lists. I think that's a big new thing, and there'll be a lot of attempts to drive.
To drive people's buying with just.
A more curated experience, which now can be done using JENIAI So I'm pretty excited about that. And then I do see already early in the holiday shopping season retailers coming to us and saying we would like to subsidize the interest of consumers might pay in these loans, and they choose to essentially offer zero interest loans, zero interest financing plans that we power of course for everything from four weeks.
To four years late.
And so I see a lot of that coming, which will be amazing for consumers. Being able to take more use of money over time without paying any interest is pretty awesome.
Glad to hear you talk more about Jenai, because the last time you and I have talked about it, we were kind of talking about the limitations and you know, kind of the more boring use cases, let's say it. When it came to AI and jen AI and financial technology in particular, what's changing, especially because you dovetail with the world of e commerce so greatly, So I think.
It's becoming more and more user friendly on the consumer side, and I think AI shopping assistance and all the various things that retailers are pouring resources and you know, genuinely excited about is pretty great. We don't talk a ton about it because we want to be very careful to bifarcate.
We do not use GENEI for underwriting.
That is something that has to be very predictable and cannot hallucinate, so we stay very far from that. We do use it for productivity enhancements internally with really wonderful effects. I keep unshipping these really cool new ways for our consumers to quickly get to the right answer when they're contacting us for customer service purposes. We're also looking at all sorts of acceleration in our development schedules because we're able to use these AI generali tools, and so there's a.
Lot to be excited about.
Just you know, like every new technology you have to be appropriately careful in use cases that you don't fully have control over.
Max Back to the consumer for a moment here, because you and I talk about this a lot. The credit card uptake in the country right now, people have been maxing out. We are near record levels of credit card balances across really the spectrum of America. And then you also have rates above twenty often twenty five percent aprs.
How fast does that come down? And you know, even if you can't tell me how fast, or if you can't, then what is the relationship between how people use buy now, pay later and a mass credit card debt?
So from my point of view, and you know, am bias. So I'll talk about on book for a second. We are the right alternative to credit card debt if you are borrowing to pay for things over time, which all of us do. You know, from education loans all the way to holiday gifts, you are better off not revolving full stoff when your interest compounds. Into principle, you are paying on an exponential curve, and that what credit cards
do for you. And so I am genuinely conserved of credit card balance is growing less because of the absolute number of these balances more because of the type of debt that they're generating. It's the debt that can't run away and does run away from people. The reason by now pay later, the reason Affirm in particular, is such a good alternative is in our case not just that there aren't any FeAs and there's no penalties. In there
are gonschias, the interest doesn't compound. Into principle, if there's any interest to pay at all, it is very reasonable to stretch your budget by paying over time. It can be dangerous if you revolve on that debt and have no idea how you're going to pay it off. And I sometimes call credit cards by now pay forever for exactly that reason.
By now pay later is a safer alternative.
Max, we have to leave it there. But of course this is a much longer discussion. This is going to change very quickly this world in the next year. So that is a firm co founder and CEO Max Lenchen