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00:00I know you've had a really good couple of days here but people really look to you to kind of make a commentary on what's happening in credit underwriting more broadly. When you're looking at your consumer base when you're looking at what's happening across the industry are you seeing things tightening up here. So I think the reality of American consumer from where we sit is that people are still fully employed. They are shopping. There's definitely lots of rotation. People couldn't travel for two years. Now they're very excited to travel that category. Drew Hutton 22 percent for us year on year. People are less convinced that they need to work out in the comfort of their own home. So you see connected fitness and sports equipment for home growing a lot slower than it did a year ago. But generally speaking the U.S. consumer is alive and well in terms of credit quality. I think we are unfortunate to have been dragged down our sockets and dragged down by some of the folks that are so gently blocking it. In this category frankly I think completely and fairly. There are people that chase volume and ignore underwriting because they want to grow. And we did the exact opposite the. So the comparison came up with yesterday I think a tremendous amount of financial services fintech in this industry have basically been driving their car with blinders on and foot firmly pushed down onto the gas and hands off the steering wheel at a firm. We drive our credit car with very very much both eyes firmly on the road in hands on the steering wheel doing micro adjustments. From our point of view and you saw in our numbers we're doing just fine and we'll continue to do so because we are in fact very committed to steering it carefully. What's the point you're making are seeing a lot of fin tax really hit a lot of trouble when they're publicly traded right now in the stock market. Are you saying as we enter this different period of the economy a much tougher period that the strategy needs to change maybe less marketing spend and more focus on growing responsible customers here. Well I certainly should not and cannot speak for the entirety of the competitor said. The two things are really important to understand about a firm is one are marketing spend does not drive our growth and our consumer acquisition. We grow because we appear on more and more checkouts. We have these fantastic partnerships with Shopify at Wal-Mart and Amazon. Literally hundreds of thousands of merchants all over the web. That is where our growth comes. Their shoppers use us to buy things and said that's how we meet these buyers. That's how we help them. So marketing has very little to do with our growth. To credit is a thing. You decide to manage long before tough times begin. We have a decade of operational experience and data driving our company to be a fine steward and student of credit. If you wake up and say Oh my God we're facing a recession fears a quarter from now or a year from now you're already toast. You don't have the data or the expertise to do this. The reason we're confident in our ability to drive profitable transactions through growth is because we have been learning for years how to manage credit really really carefully. We didn't start out there but required it. Now Max as we head towards potentially people are worried about whether it's a technical recession and some sort of slowdown does that mean more people come to your services. Does it mean people pull back because they're spending less on these sorts of targets Wal Marts and Amazons. What do you make of the landscape for you and how you build your business the opportunities that. So we have a very brief but very colorful sample of what happens in a recession. So if you remember the most recent U.S. recession lasted three months right before the government decided to print money and help folks get through the beginning of Covid. We saw a broad increase in demand for our service. Many of our merchants selling commodity products saw a quadrupling of demand literally which as you know sounds hard to fathom because people were scared in all sorts of things going on. But you still need to feed your family. You still need to buy things especially consumable things good or bad economic times. And so folks become much more interested in stretching their dollar between inflation and a potential recession. You lose your buying power. The purpose of a firm is to responsibly give it back to you. So we absolutely expect increasing demand. You know speaking of volatility and preparing for tough times we've talked a lot about crypto currencies Max. And I'm wondering with all the volatility that you see in the market here if you've changed your mind about any of these products if it's made you be more cautious about them in any way. And if your clients are asking about them in a different way. So look I think I've always been cautious about crypto currencies largely because it is really easy to get excited about the technology and the math behind things like Bitcoin and Theorem and all the really cool programmable money that people let's talk about. But if you're a normal Joe Q. Joe Q. Public consumer it's easy to get confused in some of the most recent scandals frankly are all about greed overriding fear and confusing consumers into losing a lot of money. We have just introduced Bitcoin interest into our savings account so you can actually choose to have your you'll pay to a bitcoin. It is going to be for vast majority of our account holders that balances are not that huge. You will get a few. Satoshi is here in there. That is a great way for a consumer to feel the rush of being exposed to the currency. And hopefully as bitcoin overall continues to be one of the best performing assets actually pick up some interesting yield for yourself but is also quite safe. The whole goal here is to make sure that for us at least as a company that see ourselves as a steward of our consumers financial health. We don't want to trip you up. I think crypto products sometimes have the potential and it's part of our job to to warn against them. Max I was looking at some influences one of about a time on tech talk and never heard of this. Like so there's one bright woman called Mrs. Dow Jones and she's wringing our hands a lot about buy now pay later. At the moment she's got a lot of Jonesy young wannabe investors or just uses of markets and spending. How you how you continue to fight the narrative that you are not like everyone else. You know if I could if I could have one big brand marketing campaign it would be all about us not being like everyone else. But I think it's the sort of thing that the more you sort of say I'm not a crook the less people believe it. So we'll just take as many years it takes to get there. We don't charge late fees. We just close every single number. That price never changes all the things that you know about a firm. I have always been true from inception and we continue to do so. It's not about fighting narrative. It's about engaging. Consumers are repeat. Consumers were E 1 percent of our transactions last quarter. And that fundamentally speaks for itself. People come back because they know we're good for them.

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Affirm CEO Levchin on Crypto, the Consumer, Volatility

Affirm CEO Max Levchin talks about the strength of the consumer and the recent moves in crypto. He speaks with Bloomberg's Sonali Basak. (Source: Bloomberg)

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