Affirm: Why Shoppers are Walking Away from Credit Cards | Invest in Progress S4 Ep2

Affirm’s buy now, pay later service offers shoppers a transparent alternative to credit cards. It tells consumers up-front what monthly charge they face, promises no late fees or hidden charges – and in many cases offers a zero percent interest rate. Co-founder and chief executive Max Levchin reveals how the business originated in his own “painful” experiences with credit cards, and how AI-powered shopping agents could supercharge its future. Background: Scottish Mortgage first invested in Affirm in 2019, when it was still a private company. Today, the listed business provides credit to millions of customers across the US, Canada and the UK when they make online and offline purchases, and it has its sights set on further expansion and taking a greater share of business away from the incumbents in the credit card industry. “No one loves thinking about money because it’s a drag, it’s complicated,” Levchin tells investment manager Tom Slater in this interview. “It doesn’t have to be this way. And we’ve proven that for our little niche, big as it is… we can alleviate the burden.” Chapters: 00:03 Coming up… 00:48 Introduction 02:25 Max Levchin interview begins 02:51 A transparent alternative to credit cards 04:05 A threatened amputation 08:52 Lessons from PayPal 11:44 Returning to the world of fintech 14:28 A terrible credit card experience 18:15 Attracting early investors 22:14 How Affirm works 25:48 The appeal to merchants 28:36 Focusing on the Affirm Card 31:23 Underwriting data provides a ‘powerful moat’ 35:41 Why permit credit for luxury purchases? 39:25 Listening to your gut 42:20 How big could Affirm get? 45:39 AI agentic shopping 48:54 What the world looks like if Affirm fulfils its mission 50:38 Claire Shaw and Tom Slater on the investment case 57:35 Podcast lookahead Please see our glossary of terms: https://media.bailliegifford.com/mws/... Check the podcast description to ensure this content is suitable for you. Your capital is at risk. Presenter: Claire Shaw Executive Producer: Leo Kelion Line producer: Jessica Rooney Broadcast Technician: Samuel O’Hare Editors: Kerry Ingram