But part of why the NPL world does not like to report to the bureaus, the original scoring systems used by the bureaus, their own or their Issac ones don’t really correctly account for what these loans look like just to share multitude of them. And so part of the work we’re doing with the industry and the bureaus is to make sure that it works the right way for a young customer.
Rayna Kumar: Very helpful. Thank you.
Operator: Our next question comes from the line of Dan Dolev with Mizuho. Please proceed with your question.
Dan Dolev: Hey, guys. Hey, Max. Thanks. Appreciate it. Amazing results here. I can’t get more excited about the Affirm cards, Debit+. My only question is, can you maybe give us the main building blocks for the 2024 guide? So what are you incorporating in terms of Debit+ what should we know like? Can you maybe give us like a little path of like a bridge of how we can think about 2024 with all the puts and takes. Again, great results. Thank you.
Michael Linford: Yeah. Thanks, I’ll grab that one, and Max, feel free to add anything. I think for the full year, we’ve put out what we think is the floor will exceed $24 billion in GMV. And that really reflects some uncertainty around where the ceiling is driven in part by things like the Affirm card. The Affirm Card is very early. The charts that we have in our letter showed that kind of steep inflection and early trajectory, which is really exciting, but we’re not sure where and when we get to anything that approximates us a peak there. With respect to the margin structure in the business, we would expect to see some — obviously, the full year impact of a higher rate environment. If you remember, the course of last fiscal year is as rates were constantly rising.
And we’re at or near the higher end of that rate cycle and would expect that to play out with respect to some headwinds in the cost side. And to offset that, of course, we have some of our consumer pricing initiatives, which will begin to bear real fruit. And all of that is kind of in the top line part of the business. And then with respect to operating expenses, we do expect the full year benefit of the restructuring actions that we took earlier this year, enabling us to deliver what we think will be a profitable year on an adjusted operating income basis.
Dan Dolev: Got it. And can I squeeze one more in. Shopify is pretty bold up on the in-store experience. Are you seeing any of that in the new initiatives?
Max Levchin: It’s there. It’s certainly not fully rolled out yet, but it’s definitely something that Shopify is very committed to and as a good partner with so are we. So we have lots of work to do there. I’ve said many times before, in store is the next frontier. I think frequency is the single most important thing we can focus on in terms of building out the network and most people still shop in stores, at least as much as online or more like 4 times more. And so being offline is really important. That was a great opportunity. We’re scaling that up with them.
Dan Dolev: Yeah. Great results. Thanks again.
Max Levchin: Thank you.
Operator: Our next question comes from the line of James Faucette with Morgan Stanley. Please proceed with your question.
James Faucette: Great. Thank you very much. I wanted to just ask a follow-up question on acceptance and merchants. It seems like in the current environment with interest rates now quite a bit higher than they were just even a year ago that it would be a good opportunity for merchants to find up places where they could use zero percent promotions and in conjunction with Affirm to help drive volumes, so without having to resort to product discounting, et cetera. So I’m just wondering kind of what your engagement is like with merchants and what is the opportunity to further drive Affirm acceptance and use through some of those promotional activities.
Max Levchin: Certainly, the right estimation, there are plenty of merchants who are focused on driving their top line. I mean, I think this tends to come up in our conversations on and off. But basically, if you’re a fully integrated merchant with a healthy gross margin, then the best way in my bias opinion to protect your price and perception of your prices with consumers is to use Affirm zero percent deals or fixed APR deals at this point, support much more than just zero percent. There’s lots and lots of different promotional offerings that we’ve constructed for our various partners. So we see great interest in that with plenty of merchants who are resellers and they’re fairly far down the supply chain, they do not have the margin to support zeros, and it’s difficult for them.
Sometimes, we’re able to bring in manufacturers of the original equipment or the original items and they step in and create zero percent deals, and we have a healthy number of those and have a lot of plans to expand that. But generally speaking, you’re exactly right. There’s plenty of worry by merchants to keep moving the merchandise they need to discount, discounting kills price integrity and we’re here to help.
James Faucette: Thank you. And then on RLTC, it seems like it was good to see that margin, particularly on Debit+ and the ramp you’re seeing obviously. How should we think about the mix between interest-bearing or pay now or plan for on more of a medium-term basis for that product?
Max Levchin: That’s a great question. So for the moment, I am personally a little bit [indiscernible] in a sense that we are not quite done improving the frequency. So my goal or the company’s goal, the team’s goal anyway is to make Affirm card the top of wallet pursing (ph) device, which means that whatever your percentage of paying out transactions is, I want them all and whatever you might put in your credit card, I want you to put on the Debit+ flash Affirm card. So for the moment that sits at 42% pay now or something like that, and the rest is both interest-bearing and non-interest-bearing. The really cool footnote in the non-paying out part of this is that we are in control of which one you choose. We are the ones presenting a modified version of Adaptive checkout, both before and after the swipe wherever you decide to go in terms of borrowing.
And so we have a lot of control over where you’re seeing 0s and we’re not seeing 0s and depends very much on the merchant contracts and promotional activities we have with them. But in terms of the target pay now versus not, we’ll start reporting on those once we get to a certain level of scale, but at the moment, more of each kind is better.
Michael Linford: The other thing I add just to be really clear, the 42% stat, and we break it out in our shareholder letter, that’s on a transaction basis. We would continue to expect the AOVs of pay now to be substantially lower than the interest-bearing transaction, which means on a GMV basis, the mix would be much lower in terms of percentage of pay now.
James Faucette: Okay. Great. Thanks for that, Michael and great color there Max. Appreciate it.
Operator: Our next question comes from the line of Eugene Simoni with MoffettNathanson. Please proceed with your question.
