Insider Q&A: Max Levchin, founder and CEO of Affirm

NEW YORK (AP) — Founded in 2012, Affirm is one of the largest “buy now, pay later” companies in the U.S. It is also the only U.S.-based buy now, pay later company that is publicly traded.

Affirm’s stock has lost nearly 80% of its value this year as soaring inflation made investors doubt the future of buy now, pay later services. This week the company forecast revenue for next year that was worse than analysts expected, kicking the stock lower again.

Founder Max Levchin was part of the team that helped launch PayPal in 1998. Levchin recently spoke with The Associated Press about the health of Affirm's borrowers and its increasing number of competitors. The interview has been edited for length and clarity.

Q: One thing notable in your earnings is the increased usage of your product. Customers have on average three loans with you, up from two. Why is this frequency going up?

A: I think it really showcases that we are hitting an unmet need and developing loyalty with customers. We’re now available in roughly 60% of e-commerce retailers, as well as places like Shopify and Amazon. We’re finding that once you’ve used Affirm once, you’ll do it again and again. We expect that frequency figure to keep growing.

Q: There have been some signs of consumers getting financially stressed by inflation. How is it impacting your borrowers?

A: I would not call it a sort of preamble to a potential downturn, but it’s not the same kind of a smooth sailing it’s been for the last 11 years. We have seen some stress (among those with the lowest credit scores), and those are starting to have a hard time.

Q: So, is this impacting your ability to make loans?

A: Not at all. We have taken a much more conservative approach, but that doesn’t mean we aren’t making loans. We can estimate a borrower’s...