Reginald Smith: Okay. That’s helpful. And then thinking about you guys break out quarterly the number of kind of new transactors, you also give like a mix of volume. I was curious, and my guess is that it probably doesn’t track your volume mix. But if you were to think about where your new customers have come in, whether it’s paying for core zero or installment, what’s that mix? And then the second piece of that question is, in cases or instances where you’re not the only BNPL solution on a website, how does that impact, I guess, new user adoption? Is there any slippage in your impact from being, I guess, the exclusive of BNPL provider on certain platforms in terms of acquiring new customers, if that makes sense.
Max Levchin: Yes. It’s a good question, a lot of depth to this. I’ll start my guess as Michael will have some stats that he is willing to share, maybe not. In terms of exclusivity versus not, we don’t need exclusivity to win. We are very, very comfortable being right alongside other BNPL providers because we offer products that are quite unique. And so wherever adaptive checkout shows up, that is, generally speaking, what that particular customer base needs and so our ability to predict what might be best for that user is really good and et cetera, et cetera. We also have underwritten 50 million people in the United States alone. So the brand speaks for itself. We are unique or mostly unique at this point, which is actually to the good that we don’t charge late fees, we don’t compound interest.
We don’t have deferred interest, et cetera. And so our customer knows who we are, they seek us out. And even the ones that don’t have an Affirm account yet, there’s now a meaning to what Affirm stands for. And I think it took a long time to persuade the market that we really are not lying or not kidding when we’re saying there are no hidden fees, but it seems to be working at this point. And so in terms of exclusivity, not a hugely important thing. I’m confident that people who love their brand x competing product probably go through that door. So I’m sure we are not alone in the feeling of our users love us, but our users do seem to love us. And if you read my letter, I have a little bit of a dramatic story from a recent store trip where this woman was just — we couldn’t have scripted it better.
She was gushing about us and comparing us to all the competitors saying, oh, my god. You’re so much better than everybody else and like so you’re very familiar with the market and you’ve made a choice. So I think from sort of anecdotally and in the numbers, we don’t suffer from being side by side with anybody. I don’t know if Michael has anything to add on the specifics of where we pick up the new users?
Michael Linford: No. I think it definitely tracks where we currently have distribution in the products that we have distributed there. Every time we’re shown on a product display page, every time we’re seeing a checkout, it’s a chance to acquire a user, but it also a chance to reengage new users. The only thing I would add is that it is the case that when we are launched side-by-side, maybe as a second or third BNPL product on an existing merchant site, we do see higher repeat rates there. And I think that’s the power of our network on display. And oftentimes, merchants really quickly understand that adding us is incremental because of that.
Max Levchin: Yes. Actually, one other thing that I should have said earlier, one of the niceties of being as large as we are, is our ability to sort of barge into some of the checkouts that used to be exclusive property of another player and say, hey, we’re not telling you what to do, but we do have 50 million people, we’ve underwritten that at least a large percentage of really, really like this, you probably should add us alongside the competitor. And I’ve said it before and I’ll say it again, the first fundraising deck that I’ve ever put together for this company, featured a mockup obviously, of a convenience store door that showed Visa, Mastercard, Amex, Affirm, sort of the ultimate goal of this company is to be a brand that everybody just expects in a grocery store door.
We’re starting to get there. We’re not quite there yet, and I don’t know if we’re going to be there, certainly not next quarter, just if we go back to the, we don’t run the business by quarters thing. But that is the future we’re trying to get to. And we’re now in a place where merchants say, well, yes, I probably should add you guys because there’s a lot of people who want to use Affirm.
Reginald Smith: No, that makes sense, and I appreciate that. The reason I ask is, obviously, you’ve got a lot of questions about Walmart and then introducing their own thing. And I think it’s good to hear how you guys compete or just how viable the product is even with a competing brand a button. So I appreciate the color there. Thank you.
Operator: Thank you. Our next question comes from the line of John Hecht with Jefferies. Please proceed with your question.
John Hecht: Good morning and thanks very much for taking my questions. Just looking at AOV. Now I know AOV has been really impacted over the last several quarters by kind of a mix shift from some of the larger transaction partners that you’ve had. But I’m wondering what you’re seeing at the point of sale now and if you’re seeing any trends for what users are using to buy now pay later for now relative to where in recent quarters and what that tells you about usage in the future?
Max Levchin: I’m going to disappoint you on this one. I don’t know if I have any observations to offer. It’s important to note that those, AOV trends are pretty stable, like the ebb and flow based on where we are and outliers, if you wanted to segment it, which we obviously do, you’d see it correlate to things like who launched what 0% sale and what new something is being sold where. And so it’s a bit of a — it’s a ratio to compute, but it’s not a — it’s not a metric that is profound to our business. Obviously, generally speaking, I think, AOVs trending down — somewhat down is a good thing, that suggests that people are using us for more and more things that look like daily purchases. Obviously, with Affirm Card, we would want the AOV to be approaching your typical debit transaction. That’s sort of the most, I think, I have to say.
John Hecht: Okay. That’s helpful. And I guess maybe product mix, is there anything going on there that’s evolving over the recent quarters that gives you a sense of changing customer dynamics?
Michael Linford: No, not really. I think we continue to have a lot of ambition to serve as many transactions as possible. I think clearly, we have a strong position in the higher average order value, more considered purchases, the trend downward that Max is alluding to is a function of a lot of intentional effort. Some of that shows up in products like the card where we want to serve as many transaction types, including pay now. Some of that shows up in the kind of distribution that we’re pursuing, which allows us to serve lower average order value, higher frequency transactions. I think the — not a surprise that as the AOV has moderated a little bit downward, you’ve seen frequency rising quite steadily. And so we know that the higher, more consumer purchases are ones where we have a really strong position in and we have some continued opportunity in serving up the smallest transaction sizes.
John Hecht: I appreciate that. Thanks.
Operator: Thank you. Our next question comes from the line of Andrew Bauch with Wells Fargo. Please proceed with your question.
Unidentified Analyst: Hey, Guys. Thanks for taking the question. It’s Lamar on for Andrew. I have a follow-up on the Affirm card. And this one is specific to kind of like penetrating offline commerce and kind of like some of the improvements that you’ve been making to the card over time. Is there any update that you can provide on, I guess, specific usage as it relates to certain vertical segments? Maybe some color on where you’re seeing sustained strength and then maybe increasing strength over time from a use case perspective as you continue to make these improvements?
Max Levchin: Sure. So generally speaking, as I mentioned just now, we’re seeing a steady increase in pay now, which is good. That’s just that people are comprehending then product better. There are obviously three different modalities to the fully connected card, which is preplanned transaction, swipe to pay now and swipe and split later. Pay now increasing suggests that more people are connecting their accounts. They are maybe opening up for money accounts, et cetera. So that’s all kind of to the good. We think that we’re pretty focused on is making sure the card is really, really useful and valuable to you as a consumer in day-to-day transactions, be it groceries and gas and restaurants, et cetera. And so there’s a lot of just subtle work to do there to make sure that we are very close to fire and forget type transaction device, which is what do you expect to work in a multi-line checkout, et cetera.
So that’s what we’re working on. We are seeing — I think I took that out of the letter, but we were trying to flash a stat on how the restaurant usage is picking up a little bit. And so these are not sort of headline changing results, but we’re quite happy with the way things are trending in that domain. But again, it’s just really important to understand that the card is very, very early. I know we’ve been talking about it for a long time. It takes a long time to invent a new type of card. It’s neither credit nor debit, it takes a long time to spec it, it took us a long time to build it, it took us a long time to make sure we’re comfortable with the various risk modalities that we’re introducing with it. It’s now going really well. We’re still very early.
We have a lot of room to grow and a lot of features to add. And that’s probably the most important thing. Like I would just judge the card in terms of what it’s doing when it’s no longer in the first part of the S curve.
Unidentified Analyst: Okay. Thank you.
Operator: Thank you. Our next question comes from the line of Ramsey El-Assal with Barclays. Please proceed with your question.
Ramsey El-Assal: Hi. Thanks for taking my question this morning. As you look to roll out into more international markets, is your current funding model agnostic when it comes to operating outside the US? Do you have to find geographic-specific partners? And then I guess on top of that, what about credit performance as you roll out these markets? Is there a period where models will need to season in sort of new geographies? Or is a lot of the intelligence in your US model sort of transferable as you move into different geographies?
