Opinion
Levchin: Point-of-sale credit cards with deferred interest are borderline evil
“There's a sort of an implicit indictment of the larger banks that do what's known as point of sale issued credit cards, which is, you know, some are borderline evil product because they give you a zero percent financing unless you miss the first payment, at wh…”
Opinion
Levchin: Crypto has proven successful as a store of value, not payments
“And I'm not convinced it's a payment method now, and it's been quite some time. But as currency and commodity and a star value goes, it's certainly proven to be extraordinarily successful.”
Assertion Contradicted
Levchin: Affirm is the only BNPL provider doing multi-year installment loans
“So we are the only company in the industry really, there's plenty of competitors who are trying and some degree of success, but mostly not really, who will go into longer term loans. And by longer, I don't mean mortgage or, you know, 15 plus years, but like th…”
Opinion
Max Levchin predicts AI agents will handle payments before autonomous shopping
“I'm probably less optimistic about agentic shopping, and I'm very optimistic about agentic payments.”
Prediction Not checkable as stated
Levchin: AI agents may finally replace the credit card interface
“This notion of sort of the best user interface ever created is the credit card. This may actually be finally up for renegotiation because agents are in fact smarter than pieces of plastic and even pieces of plastic with rewritable chips.”
Prediction Not checkable as stated
Levchin: Modern fintechs will replace traditional banks for direct deposits
“There's definitely going to be several probably winners that take the spot in your brain that belongs to Wells Fargo for your parents, the sort of a place where your money goes into a direct deposit account of some sort that takes care of your billing mostly a…”
Prediction Held up
Levchin: Affirm does not charge late fees to consumers
“And if you're late, we're not going to charge you a late fee because that's our fault. We didn't remind you correctly. And when we made the underwriting decision, we made the choice to take you on as a risk and that that's, we're going to have to stick with.”
Insight
Levchin: Internal transaction data outperforms social data in risk models
“The most valuable data is not social data, not what you eat for lunch, not even debt to income ratio, even though that's fairly predictive, but your own data, because every data set that you're looking at internally Describes your own process, including your b…”
Assertion Not checkable as stated
Levchin: A properly launched new credit card initially loses 50% of volume
“One of the things that happens for a brand new launched credit card Done right, you lose about 50% of the dollar volume in the first several months, which is terrifying because it's half the money, literally.”
Insight
Levchin: Banks fail with millennials due to brand identity, not tech
“Finally, I think the smarter ones of these banks kind of recognize that an impediment to their forays into the millennial demographic in particular is not lack of technology or lack of the right product. It's actually who they are.”
Insight
Levchin: Every niche in payments is at least $100 billion
“There are no niches and payments that are smaller than a hundred billion dollars, and so that's probably the most surprising thing I've seen.”
Opinion
Levchin: Card payment interface is the best UI ever created
“The card payment interface is the singular best user interface ever created, and it, it's not something that people haven't tried to do better.”
Insight
Levchin: Convenience trumps all other factors as transaction size shrinks
“The convenience just trumps everything else as the total amount you're trying to send goes down.”
Disclosure
Levchin: Affirm exited online education financing due to terrible quality
“A firm briefly flirted with being a payment provider to the online educational facilities, which we ran out of kicking and screaming because the reason they're willing to pay these enormous MDRs is because the quality of education is largely terrible.”
Disclosure
Levchin: Affirm will never charge late fees or use deferred interest
“There will never be an asterisk on a firm zero. That, that is the origin story of why we don't charge late fees, we don't do deferred interest, all the sort of gimmicks and gotchas that the industry loves to throw at people.”
Insight
Levchin: FICO scores are insufficient to underwrite multi-year installment loans
“And to do that, you have to underwrite. Like, you can't shortcut the, I'll just look at your FICO score, or I'll just sort of, you know, I'll look at your Facebook friends. Like, none of that works. You actually have to do a real, very sophisticated degree of …”
Assertion Not checkable as stated
Levchin: PayPal deliberately selected and hired future startup founders by design
“As we were interviewing, certainly the early team and even the later team,
We kept on selecting for entrepreneurs. We would ask, like, one of the stock questions I would ask was, so what are you going to do after PayPal? And the answer that I welcomed the most…”
Insight
Levchin: Seeing peers' human vulnerabilities inspired PayPal alumni to pursue massive ideas
“So if you know kind of the true base version of who we all are, as you watch one of these people go for something really big, like Elon Taking humanity to Mars, which is extraordinary. And yet, you know, he's a human being. Like, I've seen him sweaty and tired…”
Prediction Not checkable as stated
Levchin: Adoption curve of autonomous AI commerce will likely be slow
“I think the adoption curve is probably going to be fairly slow, and these things are always sort of easy to predict to be very slow, and sort of the usual adage as well, slowly at first, not always once.”
Assertion Not checkable as stated
Levchin: Affirm drives a 30% sales increase for most partner merchants
“We see about a 30% increase in sales for most of these merchants.”
Opinion
Levchin: American Express has failed to market to young people
“One is American Express. Which I think is probably one of the best financial institutions out there, but they have not figured out how to market to young people at all. There's really not that much cool left in the black card if you're an 18 year old.”
Disclosure
Levchin: Affirm is competing to become consumers' primary financial advisor
“We're certainly in competition for that, the opportunity there is not just to be the thing that's in your head and you're using it every day, but the thing that in your head that you know is your trusted advisor is actually your helper.”
Prediction Not checkable as stated
Levchin: Traditional banks will not exist in their current form soon
“So I actually think banks in a few years will probably not exist the way they are today.”
Insight
Levchin: Revenue opportunity in B2B financing is lower than consumer lending
“There, there's some healthy businesses these days in both accounts, payable financing and accounts receivable financing. So it's not, This is, it's not a bad idea, but the revenue opportunity, despite being an unregulated lending space, is seemingly lower than…”
Max Levchin