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All right. Welcome and good afternoon. I'm Tim Smith.
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I run the global customer success team at Stripe,
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and I'm here with Vishal Kapoor, who's the SVP of product at Affirm.
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He leads all of the product across merchant, consumer, platform,
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and really all the things we've been working on, even including agentic.
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So really happy to have you here today. I'd love to just start,
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maybe you could do a top of mind. What are you thinking about right now?
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Well, first of all, thank you for having me. This is a full house.
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Yeah, it's great.
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There's a lot of interest in the subject. What's top of mind for us?
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If I say "agentic," will I get booed or maybe yays? No,
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it's not actually agentic. I will take a different tact on this topic,
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which is consumer sentiment is very much top of mind for us.
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So we at Affirm have been on this mission to reinvent finance and modern credit
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from the ground up because one of the core beliefs that we have is that credit
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is broken for many. And so on that mission over the last 15 years or so,
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we have seen many ups and downs on consumer sentiment.
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And right now we are seeing that consumer sentiment is actually at one of its
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lowest points
And the customer is getting more deliberate.
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So that's like one thing that is top of mind.
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The second thing that is a corollary of that is that BNPL has moved from being
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just a feature to a network and we are seeing a lot more secular demand
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for this kind of product because it's more discretionary for customers and it
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gives back control to them. And the last one is the partnership with Stripe.
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We have built a lot of stuff and what is top of mind is like what all can we be
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building together to deliver the value for both consumers and merchants together
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with Stripe.
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That's great. That's a great list. So in this session,
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we're going to walk through six different areas.
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We're going to talk about what's going on with consumers.
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What do we see around conversion trends today?
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What the best Stripe merchants are doing with our solutions together?
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What about AI is going to change all this in the coming years and where we're
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going together in our partnership.
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And then we'll close out with some mindset shift topics.
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Maybe we'll go back to the basics, right? Which is,
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I think we remember at the advent of BNPL,
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I think people didn't think it was going to be real.
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They thought maybe it was a flash in the pan.
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It's just for like a subset of young consumers that don't have credit records
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and they don't want to have a credit card.
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And so it was just viewed as this alternative thing and it was a flash in a pan
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and it wasn't going to work.
But it's come so far since then.
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And I think as a merchant, there was this time a few years ago where you would,
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you're like, "All right, I got to make my one pick. Who's it going to be?
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And then this is my decision forever." And I think what has changed is like,
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these operate much more like a network now. So
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you're not just getting access to one set of consumers.
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It comes with all the relationships that they have.
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The adoption is much broader. The demographic is not as narrow as it was before.
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You're actually seeing these show up in way more categories than you used to see
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them show up. So it's been a huge change.
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And I think most of the merchants in the room know this,
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but I'd like to just go back to the basics.
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What do you see that is really changing in recent years around purchasing and
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checkout decisions on BNPL?
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Yeah.
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I think your point about being a gimmick actually is a really good one because
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even before I started at Affirm,
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long before-and I have the receipts to prove this-I bought a Casper mattress,
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and I thought it was a scam because I was like,
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"Why would someone give me 0% for whatever?" I was getting 24 months, 0%.
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I'm like, "This seems I shouldn't enter my details in this particular box.
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But then someone said, "Okay, this is true. I've used it." I'm like, "Okay,
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phew,
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this is the real thing." And the company started on that basic premise that
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considered purchases,
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people want to actually take decisions and finance them over a period of time.
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The concept of lending is not new. It's as old as time.
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But the way that Affirm has actually executed is the differentiator because we
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look at every single transaction and underwrite it based on the consumer's
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creditworthiness.
And so that transition-let it sit for a second-from gimmick to
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an actual network didn't happen overnight. It happened because consumers,
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like me, found religion and then used it more and more. I actually want to know,
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how many in this room have used Affirm in the last 12 months?
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I'm taking a leap of faith here. Okay, that's pretty decent.
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And you are potentially in the outlier group of high-FICO,
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which I'll talk about in a second.
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But our product is serving the greater American
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population, and we have about 25 million actives right now.
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And what we notice in the consumer is, as I was saying earlier,
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the sentiment is shifting for the negative.
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Every spring feels like déjà vu to me.
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There's something or the other from pandemic to Ukraine to tariffs to
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gas prices to war.
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It just is like every single spring people come back from vacation and there's
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something or the other happening. And the markets rebound.
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They're actually all-time high.
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But the consumer sentiments stay where they were and they go lower and lower.
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So I think that is very, very top of mind.
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And it's like a little counterintuitive because I think at every turn people
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have said, "Oh,
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these shifts are going to push people away from these payment methods." And
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actually it's like driving more consumers than ever to work with Affirm,
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which has been a huge countertrend.
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That's exactly what we noticed. When consumer sentiment goes down,
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when people are uncertain,
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they look for confidence and that is what Affirm gives back to them and clarity
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and relevance.
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And what we have seen in that particular era that we are living in is that
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as the confidence is going lower,
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we do a lot of surveys and University of Michigan actually does one as well-75
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years old-they're seeing the lowest point in the curve right now.
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65% of middle Americans are saying that, middle-income Americans,
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are saying that they're delaying or deferring a purchase of a larger size,
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and then about 59% are saying that they're reluctant to take on more debt as
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the economy doesn't really serve their needs.
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Yeah.
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The one other thing I want to ask you about that I don't think we've really
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mentioned either is like some of the network effect and the like,
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these aren't one-time conversion effects.
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These are also you bringing consumers back for repeat purchases.
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You are using your app to drive your consumers into the
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merchants and just like, what do you see the response to that?
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Tremendous. So if you go and look at the app store,
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Affirm is one of the top shopping apps,
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which is a little bit interesting because people are actually coming to the
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Affirm app in tens of millions, actually, actives,
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to look for the best financing offer that they can find for their particular
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purchases. So it's both a discovery,
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but it's the affordability that they're showing up for.
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The other amazing stat that I like to throw on as a party trick is that about
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70% of our consumers are either prime or near prime,
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which is also counterintuitive because when it started, as you were alluding to,
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people were like, "Okay,
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maybe these folks don't have alternatives and they don't have any other access.
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So we are providing access." In fact, we are also, in addition to access,
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we are providing, as I said, relevant,
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clear terms that they're not seeing other places.
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Yeah, super helpful. So we talk about,
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we know consumers sometimes have hesitation around certain kinds of purchases
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like the,
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you want to buy the TV or some piece of electronics or like more and more,
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it's like moving into services and other areas.
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And so the buying decision,
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like we've always thought about what I pay with as like it's a checkout problem,
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right? But I think the funnel has really expanded beyond that.
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So can you talk a little bit about like,
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what are you seeing in the like full funnel that moves the hesitation into
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conversion?
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Yeah. So if affordability is top of mind, if you look at the consumer sentiment,
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the secular trend is that customers are very budget conscious in terms of what
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they're actually trying to buy.
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And "Can I afford it?" is a top-level question that we are seeing that really
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translates into either an anxious customer trying to find the best price or the
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best deal they can get. That's one angle.
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Or a confident customer that shows up to a website knowing, "I can afford X.
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I know I will get these terms at the end of the checkout journey.
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I'm going to take the plunge because I'm confident,
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and the terms that I'll see are going to be more relevant." So what turns
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uncertainty into certainty is confidence and relevance,
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and Affirm does both for the customers, which is the key job to be done.
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And when we see that shine is actually when the merchants are taking that into
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their own base and enabling Affirm a funnel,
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so when people see As-Low-As messaging, as they enter the website,
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and we see that secular trend across a host of different merchants,
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many of them on our joint network, be it SeatGeek,
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who is doing ticketing and considered purchases for experiences where
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customers are looking at World Cup is a thing that is coming up.
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"Can I afford it? Should I go?" They're using Affirm to buy things on SeatGeek,
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and we see an average order value twice as much on SeatGeek versus when Affirm
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is not offered.
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And from what I read about those tickets,
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you pretty much need Affirm to get them.
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More and more so. As someone who actually did buy some World Cup tickets,
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it's very expensive and affordability again is top concern even for myself.
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And I'm like, Affirm is a really good way for me to pay for these tickets.
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But the secular trend goes to other use cases, right?
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So another interesting thing we're seeing is through GlossGenius,
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we are seeing things to Tekmetric, which is a local auto shop.
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So it's not just singular merchants, it's platforms, it's SaaS providers,
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it's across a host of different surfaces and modalities.
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And what we see is that someone who might need their hair done every six months
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or someone who has an immediate urgent auto matter,
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these are all places where consumers are shaky and they're not certain.
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And if they see Affirm available, they're like, "Okay, I know what I'm spending,
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and why am I spending this?".
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Nice. And I know for the payments people in the room,
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they're like big on statistics. So any good statistics on what this drives?
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So as I said, on SeatGeek, 2X more AOV,
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and you can actually see that in the A/B testing that we have done jointly.
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That's huge.
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On GlossGenius, we are seeing 4X more sales. On Tekmetric, again,
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the AOV is expanding as well as conversion is expanding.
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So one key takeaway for everyone in the room is that when Affirm is present
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versus not, the conversion is higher secularly in all the places,
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as well as the average order value is higher secularly in all the places,
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and that is the key reason for enabling Affirm on a particular
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platform-.
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Totally.
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And we know in this like the K-shaped economy that we all hear about that like
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top-line growth in a responsible way is like the big thing at the moment.
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And so this is a tool you can use to drive that. All right.
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So yeah, coming off talking about hesitation and conversion,
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I guess zooming out a level, like just real tactically,
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like the best merchants are optimizing beyond checkout,
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they're thinking the whole path to purchase.
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So what are the most effective Stripe users doing
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up-funnel?
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Yeah.
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We are seeing actually a lot of interesting ways that merchants are enabling
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Affirm and testing and also sharing the data back.
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One consistent thing is to show the Affirm ALA
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messaging-As-Low-As messaging-as early as possible so the customers feel very
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confident walking into that particular journey.
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So that is very important because we believe that the purchase decisions are
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happening much,
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much earlier in the discovery process-the affordability thing that we were just
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discussing. So that is like a one very, very,
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very good and well known best practice. The other one is consistency.
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So making sure that if you have multiple omnichannel products-and shout
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out to Stripe, we are the one and only BNPL on Terminal right now.
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So if you have in-store, as an example, if you have online,
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if you have other sales assisted channels,
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all the places where Affirm is found that just brings the consistency of the
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experience up-front.
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And then the power of the network.
So I alluded to it in the beginning.
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So Affirm has 25 million+ active customers,
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which means in the trailing 12 months they have taken out a loan with us.
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All those customers are actually repeating in a much more deterministic fashion.
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So we have about 6 TPUs-it's growing every year, 20% or 30%,
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depending on how you want to count it.
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All those customers are waiting to see the Affirm logo on any of these
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websites. So when Affirm shows up, these customers look at it,
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they know what to expect, they know there's no late fees,
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it's broken down-that drives positive behavior. 90%, another stat,
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90% of our total network is repeating
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on the network in any given year,
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that means that the GMV is produced by 90% repeat usage,
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that for all the product people in the room means stickiness, product love,
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and a lot of these things are virtuously increasing over time.
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Totally. And I think the terminal thing is interesting because it really,
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it's like network bordering on loyalty of like your Affirm
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consumers are showing up and they're seeing that as like a sign of this being a
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merchant I want to work with.
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That's right. And payment acceptance mark,
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I mean for all the payments folks in the room is a very,
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very aspirational but true part of being a network truly where if you're
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walking into a store, you don't see your particular payment method, you're like,
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"Ah, maybe I'm not going to consummate at that purchase.".
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Totally.
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And so that is like the brand that is associated with having Affirm on these
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particular merchants and websites.
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The last thing I'll also add from the best practices is that zero percents
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really, really work. So in our last earnings, we talked about 0%;
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60% of new customers that are coming into the network-there's the 10% that is
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the new ones, 60% of them actually scaffolded on a 0% deal.
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So they're seeing a 0% as an attractive offer.
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They're taking up on it and then they're using Affirm for other purposes.
And
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then we are also seeing that merchants are actually using 0% deals to make
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sure that they can offer specific conversion-driving growth levers for their
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customers because instead of doing price discounting,
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they can just use zero as a way to actually give them a better deal.
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And we are seeing,
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we just did a 0% Day[s] [event] in October and we saw a big uplift of new
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customers, high FICO customers.
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Our card product actually took off and thousands of merchants actually
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subsidized the zeros.
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And then it was so popular and so effective that we are going to do another one
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in May right now.
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So that's another way that merchants can actually use the power of zeros to
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attract new customers, convert them and make sure that they stay on the network.
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That's incredible. All right. Well,
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we've reached the point where we need to talk about AI.
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It's obviously that we're required in any session and agentic in particular.
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Everybody's familiar with the Gartner Hype Cycle,
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where you hit the early peak and then the thing's going to change the world and
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then the trough of disillusionment,
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this is like never going to work and then it becomes productive.
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I feel like on agentic commerce,
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we've done the whole Gartner Hype Cycle and it only took like two weeks,
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and we're like going back through it again. It's like fastest cycle time ever.
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So yeah, I think everybody was like bullish six months ago.
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We were all going to stop shopping and just agents were just going to buy
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everything and it was going to happen immediately,
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which obviously that's not how these journeys go because we're still humans.
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But I think, so some people got a little bearish,
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but I think I know at Stripe and Affirm, we're like long on this,
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like this is going to happen and we're going to have to go figure out all the
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nuances of it.
But
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I think it's not only like how I shop, how it's AI-driven.
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Kevin had like the sliders this morning on this of how far I go on these things,
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but it's also like how payment options get surfaced.
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It's about experience and the checkout. And so
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why should the merchants in this room still be paying attention to this?
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And what are the things they should be doing now that are really going to put
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them in the right place when this cycles through again?
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First of all,
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I'm really proud of us for waiting half the session to talk about agentic.
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It took a lot of restraint.
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I know. Like, we're jumping into it. But jokes aside, I actually,
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at one of the dinners I had with Tim,
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I was mentioning that my first agentic experience with shopping was Subscribe &
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Save because I have a little one at home and I just said,
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"I need all of these baby supplies, and it just comes,
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and that's my agent that is doing the work for us." But in the hype cycle,
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a lot of tokens have been burned and we are now here to talk about where we are
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in the cycle.
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And I think the merchants are right in the room to be going from one
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side of the spectrum to the other because we have talked a bunch of things.
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But as you were mentioning,
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we are both as companies very long on this because we do believe that the
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mechanical work about shopping is going to go away.
So if you take shopping as a
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pleasure activity, a need activity or a mechanical one,
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the mechanical work will go away.
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So the act of finding the best price or finding the best product, which size,
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which color,
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I think a lot of that work will be done by some kind of agent in the future.
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I think we can all agree to that. Beyond that, what's the taste?
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What are you going to actually be influenced with?
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And most importantly for Affirm,
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we are building affordability as the layer in the AI agentic world.
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And the reason is that for the 15 years that have been present,
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we have been actually working towards this future that was now going to come
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in the sense that we have a data-preserving,
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message-passing network that sees the entire spectrum of who said what at what
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point in the journey in all this multifaceted ways.
And, right now,
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the best part of Affirm, because we can do real time underwriting,
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is that we can take all that power and translate that into affordability,
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which in this agentic workflow is going to become even more important because I
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think you heard Ginger talk about it as well. If you think about policy,
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like what are the people going to be putting? It's like,
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"I want this thing at that price. I don't want this at that.
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I just want to give this mandate." That's where Affirm actually can translate
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that intent into actually budgeting because once you have found the best thing
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and you want to actually ask the agent to do the shopping for you,
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you actually want to know what can you afford? That question doesn't go away.
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That question actually becomes even more important in a world where you're
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giving a lot of the control to a thing that you don't know exactly what are they
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going to pull the trigger on.
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And we all have a mental model around this, right? All of us where we're like,
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"I'm at the grocery store,
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I'm going to use my debit card and I have this splurgy purchase and I'm going to
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wait till I get my tax refund or whatever." We've all programmed it in.
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It almost becomes a subconscious.
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This almost requires us to think a little bit more about it as consumers and
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these tools are going to have to adapt to the way that we shop and know that a
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certain purchase might be a,
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this will be an Affirm purchase because it's of this dollar value and here's
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what I'm going to wait to do it, or I'm going to do it now.
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And that is another good part of where the agents,
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when they're doing the shopping on your behalf,
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they're going to be looking at what terms. So,
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for companies who have clear terms,
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and the agents can actually do the compute part of it, it's like,
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"This is going to cost you this much in that much amount of time." They will
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surface those options much earlier and much smoother to the customers versus
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how much does a credit card that revolves on 25% APR for a coffee going to
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cost you?
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That's a very difficult question because it depends on a lot of different
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variables and those things are probably going to get hidden if you ask the
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question,
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"How much is this particular thing going to cost me over next six months?".
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It is interesting because you think about for agentic to really get unlocked,
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the concept of identity has to become quite strong.
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And you've seen some of the demos we've done,
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but Affirm is inherently a payment method that's tightly linked to identity,
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right? Whereas a card has some identity,
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but it's like what's printed on the card. I've got to log in,
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and you know who I am and you probably have a cookie and all these other things
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and that's going to be really important in the context of a agentic transaction
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over time.
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That's right.
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And that goes back to the data-preserving vertically integrated part because we
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know exactly,
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"Tim is on this website trying to buy this particular item." This is the
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previous history because 90% of folks are repeats. What have you seen before?
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What can we offer?
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What is the relevant offer that you will see that will convert? And that,
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all data actually is very,
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very pertinent in the agentic workflows because they're also going to be doing
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the similar things.
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Absolutely.
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Actually, this is my cue to ask you because you had a layup for me.
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I'm going to ask you, we have talked a lot about payments where it's heading,
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even the keynote even today.
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How do you perceive the partnership that Stripe and Affirm have formed over
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many, many years,
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and what are you excited about when you look through the looking glass a little
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bit?
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Yeah. I mean, I think the beauty about this is that...
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I remember I started at Stripe in 2019 and it was so interesting because
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outside the US there were all these payment methods you could use.
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And in America, you had cards and ACH. And cards are good.
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ACH is not great. It doesn't really work for anything.
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And we just didn't have much diversity.
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And so then I think as BNPLs come in,
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it's been really interesting and we have a bunch of merchants who want to try
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it. And the biggest challenge is like, for 10 years ago,
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everybody had their own homegrown customized checkout and then it
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worked good. But then if you wanted to change it, right? It's like, oh,
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this will be like a six month engineering cycle.
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And then it's like a thing where it's like, well, it'd be this cycle,
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but I don't even know how much consumer demand am I going to get for this,
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and is it worth it?
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What will the ROI be?
And so I think this is where our partnership really works.
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Stripe has this Optimized Checkout Suite and you saw the Checkout studio that we
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announced this morning, which is like, I don't know,
399
00:21:33.470 --> 00:21:36.170
I think we have like several hundred engineers that build Checkout.
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And I would say we probably have one of the very best checkouts in the world.
401
00:21:41.030 --> 00:21:45.930
And the idea that you can just go in the Dashboard and flip a switch and turn on
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Affirm. And it can be tied to eligibility around MCCs,
403
00:21:49.070 --> 00:21:53.010
or you can choose when it's presented or we can dynamically present it for you.
404
00:21:53.270 --> 00:21:56.690
We actually have the machine learning on who are the consumers likely to use
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this. And so when I go back to that, the conversation in 2019 and 2020 is like,
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when can I put this on my engineering roadmap?
If you're using any of the
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00:22:04.090 --> 00:22:07.080
Checkout tools that Stripe has, whether it's Optimized Checkout Suite,
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00:22:07.210 --> 00:22:10.460
payment element, Checkout Sessions, we have a hosted Checkout,
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you can just flip those on with a switch.
410
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And so that's where I see our partnership really works.
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And somebody from Affirm might've been talking to that merchant and again,
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the roadmap problem. So we can do that together.
413
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And then we also showed this morning, we've got the A/B testing capability.
414
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So again, I can go from like,
415
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"I'm curious what the ROI looks like on Affirm" to...
416
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"I'm testing it with a population of my users" within days,
417
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and then going big, it's just a flip of a switch to keep going. And so for me,
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that's like, I'm a customer success leader.
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I work with our biggest users and they're all looking for ways to drive more
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growth, drive more GMV, get more merchants on their platform,
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if they're a SaaS platform company.
422
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And so there are very few things I have to offer them that are like this easy.
423
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So that's probably the biggest thing for me.
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And then I look at the things we're building like fraud tooling is super
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important. As we get into agentic,
426
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we're really trying to make agentic work in a way that's like,
427
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if you've already done an integration with Stripe,
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you probably already have 80% or 90% of the context we need about you to go do
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agentic. And then Affirm is just going to be part of that solution with Stripe.
430
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So I love that. Anytime it doesn't... I know we can vibe code a lot of things,
431
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but I think anything that doesn't have to go on the eng roadmap and can drive
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revenue and conversion,
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like I'm going to be pretty happy about.
So I love that part of the partnership.
434
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I love that it's simple. I love that you don't need to sign another contract.
435
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You can just do it.
436
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And so that's part of what really makes the partnership work.
437
00:23:34.160 --> 00:23:35.780
And well said. And on the agentic part,
438
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in some ways you were alluding to when you joined,
439
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cards and ACH for the de facto, similar to Affirm, right?
440
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We in some ways are still retrofitting a lot of our technology based on current
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networks and current technology stack. With agentic,
442
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we feel we have an opportunity to actually redo some of the wrongs from the
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ground up.
444
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And Stripe has been an amazing partner to actually think about some of the
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protocols. And we talked a little bit in the keynote as well with like,
446
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how do we redefine this from the ground up?
447
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How do we build the right protections? How do we get the right value?
448
00:24:03.240 --> 00:24:06.360
And the beauty about working with tech companies together is that we can
449
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actually start thinking through from first principles on where we working
450
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backwards from,
451
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where are some of these things that the customers have been feeling the pain
452
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from a card network perspective,
453
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and then how can agentic actually take a leap forward rather than trying to
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retrofit a lot of these things together?
455
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Yeah.
456
00:24:20.440 --> 00:24:24.920
I think one thing that you guys don't even really see is in this agentic cycle,
457
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we've built a lot of things and some with you guys and some of it works,
458
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and some of it we just like throw in the garbage and start again,
459
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and because that's like how fast the cycle is moving.
460
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And I think when we find the things that click,
461
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those are the things we're going to bring to you so that you can just get that
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speed and ability to move quickly.
463
00:24:43.660 --> 00:24:44.280
Excellent.
464
00:24:44.280 --> 00:24:45.113
Yeah.
465
00:24:45.920 --> 00:24:48.580
Last thing I was going to say on the agentic part before we move on to the
466
00:24:48.880 --> 00:24:49.713
closing thoughts:
467
00:24:51.000 --> 00:24:54.500
merchants are also facing this kind of existential issue is like,
468
00:24:54.680 --> 00:24:56.480
is my brand going to get disintermediated?
469
00:24:57.280 --> 00:25:00.260
Am I just going to be a feature inside an LLM at some point?
470
00:25:00.700 --> 00:25:03.640
Is shopping going to take part in a different part of the network?
471
00:25:04.360 --> 00:25:07.580
And we fundamentally believe that brands are going to be even more important.
472
00:25:07.880 --> 00:25:11.460
In a world where LLMs are doing the mechanical work, as I said before,
473
00:25:11.940 --> 00:25:16.160
the brand equity of a particular brand is going to be the number one thing.
474
00:25:16.640 --> 00:25:20.080
And that is what Affirm and Stripe can actually help do is like brand integrity.
475
00:25:20.200 --> 00:25:23.820
I talked a bunch about offering the best value to our customers together,
476
00:25:24.220 --> 00:25:27.780
and that is where the agentic future actually shines a spotlight into what are
477
00:25:27.800 --> 00:25:31.960
the merchants doing in that world because the translation of
478
00:25:32.660 --> 00:25:35.340
everything gets commoditized, as you were saying, we don't shop anymore.
479
00:25:35.520 --> 00:25:39.200
That's not going to happen, but when the mechanical things get put on the side,
480
00:25:39.600 --> 00:25:42.720
what does the brand actually stand for? Are you a good customer support?
481
00:25:43.120 --> 00:25:47.080
Do you have great people who are actually saying positive things about you in
482
00:25:47.100 --> 00:25:49.440
the ether because agents are going to pick up all of that,
483
00:25:49.760 --> 00:25:51.880
including what the experience with Stripe and Affirm is,
484
00:25:52.440 --> 00:25:56.300
and start to give people honest answers on this brand, this payment method,
485
00:25:56.600 --> 00:25:57.680
this and that is going to be good.
486
00:25:57.960 --> 00:26:02.720
Yeah. It's interesting. I had a conversation with ecommerce provider and
487
00:26:05.560 --> 00:26:08.720
journalism, formerly newspaper, online news org.
488
00:26:08.780 --> 00:26:11.300
And it kind of made me realize in the agentic world,
489
00:26:12.580 --> 00:26:15.660
all merchants are basically content creators is like a thing I hadn't really
490
00:26:15.740 --> 00:26:17.480
thought about before. And I think that's like,
491
00:26:18.800 --> 00:26:22.620
we're fundamentally promerchant and we want you guys to be successful.
492
00:26:22.700 --> 00:26:26.280
And I think we realize like surfacing all that goodness that everybody's been
493
00:26:26.300 --> 00:26:28.500
building has got to be a core part of the agentic journey.
494
00:26:28.660 --> 00:26:31.760
That's when it'll really click. It's the catalog stuff.
495
00:26:31.860 --> 00:26:33.680
I was going to say, that came up actually in one of the CAB.
496
00:26:33.980 --> 00:26:37.220
I sit on the Stripe CAB and that was a great conversation we had with like,
497
00:26:37.560 --> 00:26:40.300
in this new world, the content is actually the more important part.
498
00:26:40.560 --> 00:26:42.560
The mechanical stuff will actually start getting in the site.
499
00:26:42.880 --> 00:26:46.220
Totally. All right. Well, we're down to our closing question, which is just,
500
00:26:47.400 --> 00:26:50.700
what's the one mindset shift merchants should make heading into the next phase?
501
00:26:51.140 --> 00:26:53.560
Yeah. I think just to wrap a lot of these things that we've talked about,
502
00:26:54.240 --> 00:26:58.220
previously in the old world, if BNPL was a feature at the end of the checkout,
503
00:26:58.580 --> 00:27:02.960
that has all shifted dramatically, right? So checkout is not the starting point.
504
00:27:03.020 --> 00:27:05.740
It's actually the end of the journey, as you all know.
505
00:27:06.300 --> 00:27:11.280
And so the winning merchants are using BNPL as a capability because Affirm is
506
00:27:11.320 --> 00:27:14.580
a network. It has many, many millions of active customers.
507
00:27:15.160 --> 00:27:19.760
How do you actually target them and bring into your particular website because
508
00:27:19.800 --> 00:27:21.640
demand generation is not the issue,
509
00:27:21.760 --> 00:27:24.440
it's the conversion because of consumer confidence,
510
00:27:24.500 --> 00:27:28.120
which is plateauing and declining, how does Affirm help you convert?
511
00:27:28.180 --> 00:27:29.020
So I think that is one.
512
00:27:29.560 --> 00:27:32.860
And I think the key question for all of us is that as agentic takes shape,
513
00:27:33.220 --> 00:27:36.000
what are all the things that will get reimagined,
514
00:27:36.080 --> 00:27:40.320
but what are the things that will then get more in the spotlight?
And in that
515
00:27:40.400 --> 00:27:41.233
world,
516
00:27:41.380 --> 00:27:45.600
what customers have been craving for for a long time is to give them actually
517
00:27:45.700 --> 00:27:50.120
the honest truth about financing. That is where agents will know that,
518
00:27:50.340 --> 00:27:53.040
the humans-in-the-loop will know that, the platforms will know that.
519
00:27:53.440 --> 00:27:54.500
And so as you as a merchant,
520
00:27:54.680 --> 00:27:58.100
one thing you can do is just do your research on BNPL is not a commodity.
521
00:27:58.500 --> 00:28:02.000
It does increase conversion, but which BNPL is helping your customers,
522
00:28:02.520 --> 00:28:05.980
not charging you late fees, not actually taking compounding interest,
523
00:28:06.380 --> 00:28:07.900
giving them upfront pricing.
524
00:28:08.320 --> 00:28:10.980
These are all things that we think are good concepts,
525
00:28:11.280 --> 00:28:15.520
but they're going to become imminently profoundly consequential concepts in this
526
00:28:15.540 --> 00:28:17.260
agentic world. So that's the other word.
527
00:28:17.720 --> 00:28:21.860
And the last one is success in this new world will come by showing up and doing
528
00:28:21.880 --> 00:28:26.000
the right things for the customers because as all the fog separates out,
529
00:28:26.400 --> 00:28:29.660
be it normal ecom, be it in-store, be it agentic,
530
00:28:30.220 --> 00:28:31.760
be it something else that we are using,
531
00:28:32.540 --> 00:28:34.640
I think that the key value prop for customers is,
532
00:28:34.780 --> 00:28:39.260
"Can I afford this?" And if you can answer that question for them as front as
533
00:28:39.320 --> 00:28:44.280
possible, you have actually won a customer for life because their anxiety,
534
00:28:44.520 --> 00:28:45.380
their uncertainty,
535
00:28:45.620 --> 00:28:49.900
their low confidence is going to turn into actual a winning customer and a loyal
536
00:28:49.940 --> 00:28:50.773
customer for life.
537
00:28:51.340 --> 00:28:55.480
Great. Thanks for that. So just two things to take away: one,
538
00:28:55.540 --> 00:28:56.680
the consumer has changed.
539
00:28:56.840 --> 00:28:59.540
This is not what we were dealing with six or seven years ago. And so,
540
00:29:00.120 --> 00:29:02.360
they want clarity, that's how you get to conversion.
541
00:29:02.700 --> 00:29:06.020
And the last thing is just really thinking about that the rails for this are
542
00:29:06.180 --> 00:29:10.200
expanding dramatically. It's not just ecommerce. It's things like terminals,
543
00:29:10.260 --> 00:29:11.140
so card present,
544
00:29:11.700 --> 00:29:15.300
platforms where you distribute your products and then agentic are all going to
545
00:29:15.340 --> 00:29:18.920
change the way that your end consumers and buyers buy.
546
00:29:19.360 --> 00:29:22.060
So really appreciate you joining us today. If anybody has any questions,
547
00:29:22.120 --> 00:29:24.740
you can catch us up at the front here when we're done, but thank you so much.
548
00:29:25.860 --> 00:29:26.030
Thank you.