Goldman Sachs Communacopia + Tech Conf. 2025: Fireside Chat w/ Affirm CEO Max Levchin on BNPL Growth, Competitive Landscape, and Future Strat

Key Takeaways

TL;DR: AFRM outlined a robust growth roadmap, targeting sustainable 30%+ growth, product diff. (esp. 0% merchant-funded offers), Affirm Card expansion, and int’l ambitions. Merchant-funded 0% offers are accelerating, driving real incremental growth and shifting industry economics, despite high competitive intensity. AFRM’s regulatory/compliance stance, focus on consumer loyalty and underwriting “moat,” product extensibility (via banking partners, FIS), and measured int’l expansion underpin the fin. perf. outlook. Risk/reward remains tilted toward ongoing margin stability w/ incremental top-line upside from card, D2C, and int’l as scaling levers.

Core Biz & Growth Trajectory

• AFRM is GAAP profitable, growing >30% YoY, w/ rising txn frequency and greater merchant/consumer engagement.
• Levchin: “We are a mid-single digits of ecommerce in the US… real run for their money, so to say, to credit cards, but still a tiny minority relative to the overall ecommerce and certainly overall commerce.”
• Next phase focus:
  • ↑ user approval rates
  • Geo expansion
  • Card dist. & consumer engagement
  • Deepening Affirm’s "integrity" brand (no late fees, no compounding) as a competitive diff.

Market Position & Competitive Dynamics

• AFRM strongly prefers “closed loop V2” scenario, where BNPL platforms establish premium, network-like economics vs. commoditized, ‘private label card’ model.
  • Levchin: “Power of the network” and consumer utility is fundamental. “To a merchant, [AFRM’s network]… really doesn’t sound like a, let's get you a cool piece of plastic with your logo on it that only works here.”
• Network scale as merchant value driver: AFRM has underwritten 50mn+ Americans, w/ 23mn+ actives; merchants increasingly seek access to AFRM’s user base, not just point solutions.
• Merchant convos now center on how AFRM can “promote our 0% deals directly to the user base.”

0% Merchant-Funded Offers: Economics, Penetration, and Cycle Sensitivity

• 0% vol. grew >90% YoY this Q—a headline number.
  • Levchin: “It shifted from us showing up and saying…this is a very powerful way of deploying your mktg dollars…to more merchants coming in and saying, I don’t need proof. I’m ready to buy this.”
• Economic impact:
  • 0% offers have “slightly worse” unit economics for AFRM than std. BNPL, but are “truly incremental” and not cannibalistic.
  • Higher MDR compensates for lower consumer interest income. Incremental sales mean the overall profit pool (for both AFRM and merchant) can expand vs. pure discounting.
  • Example: “To do a 0% over the course of a year, we're talking sub-10% most of the time,” vs. trad. 20–30% price-off promos to drive similar conversion.
  • AFRM has robust, real-time optimization and merchant-specific deal structuring (“modeling, all the exercises”) to max ROI.
• Cycle resilience: In a downturn, Levchin believes merchant demand for 0% financing “will probably go up, not down,” as it offers “meaningfully better” economics than broad discounting.