Well, welcome everyone. Welcome to the 2026 Affirm Investor Forum. We are live here at NASDAQ in New York. We appreciate those of you that are joining us here in person, as well as those of you that are joining us virtually. This is the third iteration of our investor forum and we certainly hope it's our best one yet. As many of you know, I'm Zanceller. I'm the head of investor relations here at Affirm. Before we begin, we do have to go through a few legal disclosures.
Today's presentation may contain forward-looking statements, including projections, estimates, targets, and illustrations, as well as statements regarding the company strategy, future operations, and partnerships. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC, which are available on our investor relations website. Actual results may differ materially from any of the forward-looking statements that we make today. These forward-looking statements speak only as of today and the company does not assume any obligation or intent to update them except as required by law.
We will have several guest speakers today as you might imagine. The statements and opinions expressed by these panelists are solely their own and they do not necessarily reflect the views of Affirm. You should not treat any of their statements as a recommendation to make a particular investment or follow a particular investment strategy.
Finally, today's presentation will contain non-GAAP financial measures. These measures should be considered a supplement to and not a substitute for GAAP financial measures. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures can be found on our investor relations website.
With that, I'd like to introduce the agenda for today. We will begin, of course, with Max, who will provide an update to the vision for the company as we continue to build the Affirm Network. Afterwards, you will hear from Libor and Michael who will speak to our structural advantages and why we believe these give us an enduring competitive advantage. We will then discuss our five medium-term growth drivers. You will notice five instead of three last time. You'll hear from Wayne, Vashal, and Pat who will delve into each of these five drivers from both a commercial and product perspective. Finally, John and Rob and John Marian will close us out with an update on our funding outlook as well as the all-important update to the medium-term financial framework. With that, let's get started.
Hello. Thank you for showing up. Definitely. I was not looking for applause, but thank you. You have a lot to go through, so I'll try to get through my part quickly. In the next 10 minutes, I will tell you absolutely nothing that will help you with your spreadsheets. So, this is the time to dream with me a little bit versus dig deep into the models that are important, I recognize, but that is to come. All right, I'll tell you about what we've been up to and where we're headed.
So, if there's one thing you want to take away from my talk track, it's that we've built a network. And it's not just a network in a sort of thrown around all the time payment accepting term of art. It is a network that is real in a sense that it is fully closed loop. We are both the issuer of credit, the transmitter of the credit information, the acquirer and the risk manager. We're also unique in a sense that we are fully information preserving. That is to say, merchants and consumers give us a lot more than any other payment network has to benefit from. Most importantly, and this really is kind of the whole point of what I'm here to tell you and what my colleagues will do, you have so much more to say about, is we are exhibiting very real network effects. And the business should be, in my opinion of course, judged through that lens from this moment until the rest of this presentation and from now on.
Let's start at the beginning. So we started Affirm with a mission. The mission is honest financial products that improve lives. I wish I'd thought of a clever way of saying this when I wrote it down, but the whole point of having mission and core values is to put them down once and keep them in stone. And that is ours. We mean it. We really mean it. And I mean it so much that even for a formal event like this one where Zayn explicitly told me, 'Do not wear jeans or t-shirts,' I dress up exactly as I do every day wearing my Affirm logo in multiple parts on my person. I want to show you the other ones, but kidding, but I got to keep the room awake.
The reason for this is actually quite selfish. I love the dopamine hit of getting out there and being stopped on the street. Somebody asked me this morning in the gym whether I was the Max Levchin, which was like I don't know what was it. What's it about to happen? I said, 'Love what you've built. Love the product. It's just so cool how you guys are building this company.' And that happens a lot a lot a lot these days. Like I don't think a day has gone by over the last, you know, six or 12 months where either I didn't have the experience personally or one of my executive team wouldn't come in and say, 'Oh my god, I had just the coolest thing.' Michael, I'm going to steal his story because I don't think he's going to share it. When he was traveling to some place most recently where we met up, he said he had two, oh my god, I love Affirm moments from two flight attendants on two different flight lengths, which is like that's a new high. It is a great high. You know, I encourage you to sort of step back and ask yourself what other lending brand you know that engenders love among its customers. I'll wait but I think I'll be waiting a long time. I don't think this is a common reaction. I think our customers love it. Love us for real.
That intensity, the approach we take to our products, to the way we treat our consumers, the way we treat our merchants, our capital partners, our investors, that integrity that sort of is the building block is really important to us. It's entirely real. We don't just bring it out. Sometimes it is a daily occurrence here. That is where the brand comes from. We spend basically rounds down to $0 on brand advertising and yet we have such a strong consumer preference that comes out in these conversations.
The fundamental insight that we had 15 years ago, which is sort of terrifying to say, I was in my 30s, which is not the case anymore. The world was ready for a better approach to credit. We didn't want to build a product that was just like anyone else. We thought we would have a chance of persuading people to give another way of paying a try by simply telling them the truth, giving them a sense of control, transferring the transparency directly into their hands and doing it right where they're shopping at the point of sale. Fast forward to today, we are in more than half a million checkouts online alone. Obviously offline, Affirm card works everywhere. We're starting to break out into a thing that everyone has seen, heard of, and for our consumers, a thing they love.
So, 14 years ago, going back to the beginning, I won't trouble you with the names of the merchants because some of them are no longer with us and others are not nearly as enormous as some of the ones that we are proud to call customers. We were given a chance by literally these were friends of mine. And I would call him like, 'Hey, I got this payments company.' Like, 'No, not the first one. There's a new one different really.' And I say, 'I got a payments idea. Can you put a button on your checkout?' Like, 'Oh my god, another button.' Like, 'No, I really think it'll help.' Like, 'What do you think will happen?' What happened is what's now known as the Affirm effect. It's a 30% on average pop in your online conversion. And this has been true since the very beginning and varies a little bit. We have different share of card, different impacts on different kinds. This is not an outlier. A 30% increase in checkout conversion is a very very normal thing for a fully integrated Affirm or if you're selling many SKUs, the conversion might not go quite as much, but you would see a doubling of your AOV. Somebody would come in to buy a pair of shoes and would walk out virtually or otherwise with a dress and a pair of shoes and a bag. And that has propelled us to incredible growth from the very first point.
Like we literally went from does anybody care to I think we have a product market fit. I love to point out to our team and anyone who cares. We have never had to pivot. Like every company and this is my number nine I think I've ever been involved with. We pivoted and pivoted until we found that elusive product market fit. Affirm took about a year wandering through the desert of prototyping and trying to figure out how this thing will work. But once it clicked it's clicked. We never had to change who we are or how we do business which is you know a blessing for an entrepreneur. That doesn't mean we didn't evolve. We worked very very hard on every little bit of that Affirm effect. Affirm effect is the checkout experience. The conversion that is what we are in the business of selling. That means the user interface have to become sharper and sharper. I try to remind our designers and our product managers that we literally bring a chisel to the pixels that we have on checkout and take out any pixel that we don't think has to be there because that's between us and that sale.
The other thing is underwriting. Like it's fun, all fun and games if you're a closed loop network, but if you're the one managing the risk, which is what happens even if we sold the risk into capital markets, we are still on the hook because the next sale of the next loan depends on how well we did in the previous one, which means every single transaction has to be underwritten in real time with the tight requirement of the user interface without too many step-up questions or identity confirmation screens. And then that loan has to get approved or declined in real time very quickly. And we have to pretty soon then figure out what of the many capital markets channels it's going to go to. We've had to go from, hey, we think we can gather these things up in a spreadsheet and then figure out how we might finance it later to a giant machine that issues securitizations every month and many many other channels. And we'll talk about Cavanis program in a little while.
All of this is only possible if you have data as a first class citizen. We have built our entire company around managing data, aggregating data, mining data, modeling data, modeling outcomes. The thing that I sometimes like to say is that the product is the rocket ship that this you didn't have to pivot. The product worked. It is the rocket ship, but the data is rocket fuel. Like that is what takes us forward. The fancy graphic those of you who recognize is of course a neural network that is what powers the checkout that we have. So Affirm checkout is the product that is the conversion that we sell. So well the optimization function that takes place every time even before you click on anything even before you choose to go to Affirm the list of choices we show you in that moment is powered by a model that was deliberately designed to maximize your interest as a shopper to minimize the cost that the retailer incurs to maximize your interest to produce the best possible financial outcome for you the consumer.
Because if you're not going to pay us on time, we will lose money because there are no late fees. We've never charged a penny and never will. To make sure that we have the yield for the capital markets expectations that we have probably negotiated months in advance with a rate that has since been modified by the Fed's funds rate that all of this happens before we know who you are, if you're not logged in and if you are, we have some incremental data. So the amount of AIing, for lack of a better term, that takes place in this checkout is astounding. The thing that I will tell you because Libor who will come right after me is too modest to brag. We've been building these models for 15 years from the very beginning. The company was founded by a bunch of computer scientists who basically thought that we could do better than FICO because you know more data better techniques.
The last year and a half or so we've been working on a completely different class of models inspired by what you encounter when you talk to ChatGPT or Gemini. So it's a transformer first model with an attention mechanism that drives everything from selection of terms to underwriting. You will see the results which are quite phenomenal. But that should give you a flavor for just how much time and effort we put and how seriously we take the idea that this business only makes sense with the level of machine learning and AI that we have in our DNA. And the reason this is more important to us from the consumer's perspective obviously makes sense. We want people to feel great. We want them to have the sense of control. We want them to get the best deal possible. The wrinkle that I sort of referred to on the merchant side is actually worth pausing for a second. When you see a 0% deal, when you see an APR that compares very favorably to your credit card APR, someone is paying for a time value of money. And it's not us. It is typically coming out of the marketing budget of the merchant. And we are the steward of that capital which means that for every penny they're putting into our model we have to show them and we have to feel great about the fact that we're maximizing their yield on marketing investment.
That is a fairly profound responsibility to take on in addition to all the other responsibilities that we take. On the flip side though, we've gotten very very good at this and the giant stack of custom pricing contracts that give us the right to tap into these marketing budgets in real time is the moat that Affirm has created just on that side of the business. Trying to replicate has been very challenging for our competitors as you may have noticed. In part, that's because we've built these trusted relationships with consumers. We built a great brand. We do have brand preference at this point, but we also have a deep sense of trust and care with the merchants that we have these custom pricing and we've been leaning into 0% financing as you have seen obviously over the last couple of quarters. All of that comes from these contracts and it's a profound differentiation that we have across the whole industry.
I love this animation. So, admiring it for a second, but all this was created with AI way too quickly. But, frees up our designers to actually build products that require human involvement. As we increase our transaction count, transaction per active user per unit time has a really nice consequential effect on the data aggregation side, which translates to visibility. We understand the consumer that much more. We have less period of waiting between loans, more time or more data to understand who that person is.
Better understanding for exactly what drives them when shown three different financing programs. Are they going to accept the first, the second, or the third? We have a model that reorders which ones you'll see first. We know where your eye will trend. We know what you will click on based on previous transactions. The more transactions we have, the faster the flywheel of the Affirm network growth spins. Higher frequency of course gives us better share of wallet of that consumer makes us more relevant to the merchant. The goal of Affirm has always been to become as important to merchants as Visa, Mastercard, American Express, the great American payment networks. We're getting there by building out this network, by experiencing these network effects. The more we have of everything in the network, the easier perhaps controversially it is for us to grow because we become that much more relevant to merchants. More and more people stopping me in the street saying, 'Hey, I love Affirm.' That means they're telling their merchants either directly or indirectly, you should accept Affirm if you aren't yet, which is fortunately for all of us a diminishing number of people who have not yet integrated. We've written 170 million Americans. We've transacted with more than half of them.
If you seen our latest quarterly numbers, you can see that that number is the second number is a little bit more than the ones that transacted in the last 12 months. The opportunity to decrease the gaps between transactions to increase the frequency is still very very substantial.
The Affirm consumer is real. She does in fact exist. She has her preferences. A very large retailer decided to remove Affirm from an integrated checkout a little while ago and the expectation certainly according to our stock price movement was that we'll just lose the volume and that's going to be that. That is not what in fact happened. A large percentage, large majority in fact of the shoppers from said retailer simply went out and got themselves Affirm cards and continue to today to access Affirm at the point of sale online and offline using Affirm cards fully benefiting from all the Affirm card functionality. The volume at that retailer continues to grow for us which not what was I think many people thought was in the cards. We have 27 million active consumers in the last 12 months period. 15 million of those are in our app every single month.
That has now become a big enough surface where marketers, not just those who are paying for these 0% deals or discounted APR deals, any marketer within any retailer can come to us and say, 'Hey, I would love to tell our story. I would love to launch a product. I would love to do something with you guys. The audience is so big and we know we are seeing them on every channel integrated through digital wallets through the Affirm card.' Obviously that wasn't sitting idle as an idea for too long. We decided you know what we're going to have our own shopping event. People don't come to us to pick the thing they're going to buy. They definitely come to us with a view. I'm going to buy a thing. I'd like to know which retailer will offer me 0% financing, which is why we invented this thing called Big Nothing Days, which if you know the Affirm team, you know we love our silly puns and take ourselves extremely unseriously. And so the Big Nothing, the latest one will launch tonight. This was sort of a coincidence. I'm not sure we meant for it to be at this event, but I'm here to tell you if you're in the market for just about anything, there are thousands, maybe tens of thousands now of retailers that are going to gladly pay your interest for you and you can find it all in the map starting midnight tonight and go for 3 days. Last time we did this, which was October, we moved the needle for participating merchants north of 30%. And it had no pull forward effect, which is what retailers hate because if they promote something today and the transaction goes away tomorrow, they don't exactly love it. We waited this long to do another one because we wanted to make sure it's very clear there's no pull forward. These transactions were an expression of preference as opposed to just switch. So more big nothings coming up. My reaction to the big nothing numbers was, well, why don't we do this every week? I've been overruled, but we're definitely going to do more of these.
So I promise I'll get off the stage in a second, but I have to mock the shorts a little bit. So the best bear case for Affirm has been it's all the credit risk and no consumer preference. Like hopefully I've beaten the consumer preference horse to death right in front of you here. Like we really do have consumer preference. People will actively switch to our card only to counterweight the fact that a merchant decides to no longer support Affirm. Our merchant churn is rounds down to effectively zero because most merchants are very clear that they have to support Affirm. Our logo is important to them.
That said, the one thing that I will not try to dispute or combat here, the credit risk is real. Like Michael wanted to write our S1 starting with a sentence, we take risk, which I thought was amazing and of course the legal team had its way with it. But I love our legal team. I mean that I nerd out with them as much as I nerd out with the engineers. But the credit risk is a thing that we take on proudly. You've seen the results. You can see it every month in all of our security. So we've done a pretty amazing job. Credit is job number zero at Affirm. As an engineer, I count from zero. It will always be there. The thing about the scale of the network is three four years ago when we had just gone public I entertained a bunch of investors and one of them said oh guys you know is hundred billion dollars is that like a thing is that going to happen so you know we're dangerously close to 50 and trailing in 12 months so at this point the debate has shifted when do you get to 100 billion not if you get to 100 billion which you know I'm pleased to welcome everyone to that way of thinking that said if it takes us a little bit longer to get to that milestone which I think is entirely unavoidable in a good way. We will take as long as we must. We will not compromise the credit quality, the trust we've built with capital markets just to achieve some kind of a gaudy GMV number. And so that was important to say.
That said, I said it, but I'll say it again. The other takeaway is it is easier to grow now that we're larger, which I think for most businesses, it's actually the other way around. Not for businesses that exhibit true network effects. Merchants now reach out to us saying things like, 'A few years ago we told you guys BNPL was not a thing. It is a thing and we want it. Where do we sign up?' Even weirder version of this is they say, 'Hey, we definitely want to sign up, but could you integrate us into your app before we go live because we want to tap into your audience because we want to start using you as a marketing channel.' Which is great because it's a new revenue stream for us. Just couple more sort of nuggets to it. The last 12 months trailing 12 months looking back five cohorts that's as far as I looked every one of those the transactions per user grew faster than the one before so the flywheel is just spinning faster on its own. The most we're doing to increase transactions in the network is just signing up more retailers. If you look at card cohorts every new cohort is starting a little bit higher than the last it's spending a little bit more. Again we're not telling them please spend more we need to show good numbers. It is happening on its own. Took us about a year actually no took us more than two years to get from two transactions per user to three transactions per user. We've just gotten from six to seven in less than a year. Again, another sign that the network is just spinning. We're gaining share of mind, but we're also gaining share of wallets. The audience is now big enough where we're fielding millions of searches in our app alone for brands that support Affirm. That is a great sales tool. I frequently go to a merchant that hasn't yet seen the light and say, you know, you may not care about us, but our users do care about you. Here's $100 million of GMV that we fielded from our app. People search for you specifically in the context of Affirm. We should do something.
I can drop a bunch of brands that have literally seen the light with that sales talk track. Anyway, I'll stop beating the network effects real horse in front of you here, but that is the only thing that I'm here to tell you as is my last slide in front of you. The one on your left is a throwback. This is from our very first fundraising deck. That's why the Affirm logo is outdated. But from the very beginning, the vision that you know, no pivots. We had said we want to be on every door. We want to be a must accept payment method as important to retailers as Visa and Mastercard. And I wouldn't quite go as far as to declare victory right now, but we are really well on our way. And all signs point to the fact that this is happening. Consumers love us. Again, I love Affirm is something that I love hearing, but I hear more and more often and just fills my heart with joy. I won't steal the show's thunder, so I'm not going to rattle off all the things we're going to build, but kind of the themes to focus on growth. It is easier to grow when you're getting bigger. We are still very focused on growing modular credit, modulo, keeping extremely close eye on everything from capital markets, downstream concerns there all the way to making sure that we never overstep our credit requirements. But growth is still very, very top of mind. That means more channel partnerships, more ISVs. We'll talk a little bit about Affirm Edge, the official renaming of Affirm AC/DC. We did not want to get sued by the band. If you don't know what that means, don't worry about it. You'll see what that is in a second. And then Agentic, it's everyone's topic. Appropo, our morning's release, we are getting fully integrated into Gemini. That's not the only one, but this morning that's the one we're talking about. We're very focused on direct to consumer. The card is now a big enough part of our business that we're recognizing that we are not actually serving every economic strata the way they want to be served with our card. That just creates more opportunity for us to go build some more software which is exciting. Our card is a dumb piece of plastic with an extremely sophisticated set of features in the app and that's exactly what we're digging deeper and deeper into. And finally again a little trite. I refer you to my shareholder letter if you really want to see what that means but AI is a superpower. This is a moment where the world has divided into companies run by engineers and companies that are trying to figure out how are the companies run by engineers leapfrogging them. We are very fortunately in the former the founding team of all engineers pretty much every executive team member writes code either for their job or to make sure their job is a little bit more fun. And so we are firmly in the engineering mindset and we're loving every moment. You know, don't take no AI layoffs as what they're being portrayed to be. Those of us who know how to build software love having people who can direct AI. I'll leave it there. Anyway, Affirm logo on every door. We're not there yet, but we're getting closer and closer. It's very exciting.
With this, I will leave you in the capable hands of Michael and Libor, my two co-conspirators on just about everything we do. Please welcome them to the stage.
We will do our best to get back on time here. He is not into brevity. Brevity, thank you all so very much for being here today. I really appreciate you making the trip and listening to us yap a little bit about what's going on at Affirm. I'm up here on stage with my friend and colleague and fellow pirate Libor. And we're going to walk through how we see our structural advantages and why we think they point to long-term durable growth with really compelling unit economics.
Before I dive into the structural advantages of the business, we thought we'd take a second and put a framework out there for you to think about the way those advantages show up in the form of two reinforcing flywheels. The left-hand side we talk about a lot that is our merchant and consumer network where as we get more consumers and delight them with transactions, they get more value out of the network. Merchants want to be able to participate in that network. Allows us to attract more merchants who in turn give more value to the consumers and the two reinforce each other. We spend a little bit less time in these forums talking about the right-hand side but it's very important and we're going to talk quite a bit about it today and that is our approach to risk management and how we vertically integrate it across credit capital and everything that we need to do in order to scale the business. The key thing here is as we get more transactions on the network we get smarter. Our capital partners can have more confidence in the level of credit losses that we underwrite, thereby generating more returns, which in turn help us deliver better offers to our merchant and consumer partners. And these two flywheels really do work together. And you don't have the business without both.
So, thinking about our advantages, five we'll walk through today. I'll walk through them all in the following slides, but I'll quickly introduce them. I'll hit the first one and let Libor take the rest and then we'll come back and talk about the way they show up. The first is network effects. Max talked a lot about that. We talk a lot about that in our business. But as our business scales, it gets more valuable for all participants in the network, making our job to grow the business and network easier as we get bigger. The second again we talk about a lot which is that we have transaction level underwriting. Cannot repeat enough how important transaction level underwriting applied to short duration loans fundamentally changes the outcomes on credit. The third is our data asset. Our data asset is unmatched in the industry. We've been at it for quite some time. Models are all the rage. They need data otherwise they can't function and we have a data asset that cannot be matched. The models themselves fourth are not as interesting as the way you operate them. We can both update the models and again make decisions throughout the course of a particular period to make sure that we're engineering the right outcomes for our capital partners, our merchant partners and our consumers. And then lastly, our infrastructure scale. We have built a robust and reliable platform that allows us to serve the most demanding and largest e-commerce players in the world. That is a real strategic asset for us.
So let's think about the network effects. Here we got some data. 71 million underwritten consumers all time, a little over half a million merchants. That's the merchant and consumer side of the network generating a tremendous amount of transactions. Again, as more merchants get on the platform, consumers can get more value. As more consumers are on the platform, merchant gets better sales. They can get value out of Affirm both in terms of higher conversion, larger average order values and then obviously delighted customers. We make their customers very happy for what we're able to do for them. But we don't spend as much time talking about the network effects that we see across the broader ecosystem. Our capital partners who benefit from the scale that we create return that with better cost of funds that we can then build really compelling products for the consumers and the merchants making our growth easier. Scale begets scale and scale begets economics in our business. The result of these complicated and finely tuned systems of interactions is a very very complicated yet very powerful machine. When tuned correctly, Affirm can generate really large scale, lots of growth, and a lot of delighted and happy customers throughout the process. I'm going to hand over to Libor to talk about underwriting and infrastructure.
Thank you, Michael. Really appreciate it. So transactional level underwriting. By engaging consumers to evaluate their repayment options and pricing as a part of their purchase, we create the opportunity to individually underwrite every single transaction, which enables more accurate risk evaluation, real-time pricing, greater clarity, and of course, improved conversion, AOV, and repayment on the consumer's part as a result of underwriting each individual transaction compared to a model that is product agnostic. All or nothing approvals. Affirm is able to deliver significantly better approvals for the same delinquency rate or much better delinquencies for the same approvals. For example, this graph compares using Affirm to FICO across a large set of our transactions based on a specific delinquency target where we pick it. We are able to deliver significantly greater approvals at target economics, process more transactions, collect even more performance data, and satisfy more merchants and consumers in the process.
Through a vertically integrated product and transactional underwriting together, we are able to collect more data to train our models. We develop a clear picture of each user's behaviors, finances, choices at the time of the transaction. We are able to acquire rich data across the full journey of the purchase. Everything from offers they saw, the merchants that they considered, the terms that we offered them, what they chose, and then how they repaid those installments. This includes category, merchant, item specific data. For example, in travel, the time from when the customer made the purchase to when the trip actually happens as it relates to the length of the loan is a huge signal on repayment and ultimately approvals as well.
Vertical integration drives visibility into user choice and outcomes. And over the last 14 years, we've seen 150 billion in volume, 2.3 billion repayments, continually increasing the scale of data on which we train our models. As we've grown our consumer and merchant network, we've steadily grown the number of loans and the number of repayment installments we use to train each successive generation of model. Additionally, through research and experimentation and development, we've steadily also increased the number of features describing those purchases and those repayments, resulting in an acceleration of the combined number of loans, installments, features, the full data set that we use to train each individual model has continued to increase.
And as we've increased the scale of our model training data, as the product evolves, the models learn new behaviors and interactions differentiating how people respond to distinct offers and how that impacts their repayment to consistently deliver better performance. Now, normally on these graphs, people like to show like area under the curve, and it's really hard to kind of normalize that. So what we decided is to look at like delinquencies as it relates to approvals, right? And so we see the same effect across two distinct classes of models here. Our repeat model and our new user model. Each successive generation is delivering better approvals at the same delinquency level or better approvals at the better delinquencies at the same approval. And that differentiation across generations on the right side of each graph gets better and better and most pronounced in discovering the strongest consumer segments where we get the best repayment.
We're also very excited, super excited with our latest AI model form using a transformer-based architecture that it is delivering more it is basically discovering more pockets of opportunity more deeply in our data especially in making dimension a first class feature. So we're able to actually in using our existing data finding new information within it using transformer-based architecture. It's actually shown here. Even though the model it's on the top the green line was released shortly before our mainline model as an experiment it's already significantly outperforming the model that actually went out a month later which is the red line. So it's the form that we're going to be transitioning all of our models to. And this creates a new baseline for us to continue delivering improved performance with each new model generation and of course with even more data. This flywheel of data acquisition is steadily converted into better models which drive improved customer and merchant outcomes which in turn drives more data research and model gains.
Being able to underwrite every transaction and price every offer creates better outcomes for consumers and merchants. And being able to do it quickly and reliably is an obligation we take seriously. We're not just matching a transaction to a credit line. The full underwriting ensemble of models, policies, pricing, all of it has to work quickly and correctly every single time. We spend a lot of time analyzing obviously performance of underwriting. We obsess just as much about delivering that capability consistently and reliably every single time. For example, during this past Black Friday, Cyber Monday, we managed peaks of 4,000 checkouts and 14,000 app opens every single minute, all with a consistently high reliability. And our merchants and customers rely on us and we take that trust seriously. And speaking of merchants, Michael.
We've got to walk through a few proof points of these advantages that we discussed. The first is the size and scale of our merchant network. Obviously, we're really proud of the distribution that we already have and we think it's a market leading position. We work across nearly all verticals, all merchant sizes and merchant types from the world's largest ecom players to the small shops on Shopify. Our platform can be integrated directly with merchants and we can deliver great economics when we do that or we can use partners to integrate any way the merchant sees fit. We want to help meet the merchant wherever they are and find the consumers wherever they are. The list here is obviously just a narrow slice and we're adding more merchants every day. But we're really proud of the scale that those merchants in our platform that benefit our consumers. Again, the merchants will get bigger baskets, better conversion. We're a payment method to them. We're a marketing method for them. And it's all wrapped up in a lot of customer love.
Merchant Network is great. We also have some receipts so to speak on how we think about the outcomes on credit in capital markets. And we decided to try to visualize for the investor base here our static ABS deals over the past several years since 2023. And two big insights here. You know, the first is if you look at the top line, that's where we price the deal. We begin a deal, we tell the market that we expect this level of losses and the curves should look like the top line. The line below is a mixture of the realized losses and then a projection where we don't have the realized losses fully in yet. And it's incredible our ability to dial in the losses consistent with the pricing assumptions three years out. Affirm's ability to price credit correctly creates a real differentiation that allows our capital partners to trust that the way in which we approach losses will be consistent and just under the assumption that we put out there and that trust shows up as real economic advantage for Affirm. The left-hand side you see the credit spreads for the past several years of our ABS deals. We were running in the 300 basis point context back in 2023 and we're running in the 100 basis point context today. I don't think I have to tell this group what 200 basis points of funding cost does to our business. It's pretty powerful in terms of a tailwind and what we can do. When you also combine that with our other advantages, the transaction level underwriting models that can price risk correctly. Having that extra capacity to invest in the merchants and the consumers allows us to be very growthful and again makes our job a lot easier. But it's not just the ABS markets. On the right hand side you see the forward flow markets. The ability for Affirm to attract capital from some of the world's best investors from pension plans to insurance funds to yes asset managers is remarkable. And we've been able to do it while building real scale in the platform because of the durable advantages that we talked about.
Put simply, our investors trust us and it shows up with the results. And speaking of trust, this trust and confidence is also seen in consumer engagement. While we've scaled to 27 million annual active users, we have seen a steady increase in user engagement, capturing a greater share of their considered purchases. Since the last investor forum, we've increased the number of transactions per customer per year by 50% and now sitting at 6.7 transactions per active customer. These improvements are being driven through the expansion of our merchant network, improvements to risk management, consumer retention, and significant continued growth in card users. Of course, the increase in active consumers and number of transactions per user also reinforces our positive impact on merchants. The underwriting and repayment data we collect and the trust we build with consumers.
And AI is only accelerating these flywheels. Most exciting parts of the business are what AI is starting to do for us for underwriting as I already talked about. AI drives improvements that increase the salience of our data transformer-based models being better incorporating time thereby significantly increasing the complexity of the feature set from our existing data. AI improves the operational cadence of everything from model building servicing pricing offer creation to collection and capital allocation and of course engineering productivity. Similarly, consumer and merchant personalization also becomes richer. For consumers, we are providing a more tailored experience in everything from search all the way through to the customer support experience. And for merchants, we're providing optimized customizations customized to their business and to their customer base to deliver even better results for the same budget and to make even more efficient use of their incremental promotional budget. We're only at the beginning and could not be more excited about what AI is going to do for the business. And with that, I will hand it back to Zayn to tell us about our next speaker.
Okay. So we've heard from Max about the update to our vision and also most recently our structural advantages. Now, we'd like to go into the five different growth drivers that we have. And to kick us off, we're going to begin with Wayne Palman, who's our chief revenue officer. Please give him a round of applause.
All right. Thank you, Zayn. So, Affirm's first ever transaction was at a merchant point of sale. It was an online order from a flower delivery merchant. And 14 years after our founding and hundreds of millions of transactions later, merchant point of sale remains our foundation. So our direct to consumer business is growing very quickly, which you're going to hear more about later. But in the last quarter, point of sale still represented 76% of our transactions. Every year we welcome thousands of new merchants onto the platform. We grow our volumes with partners that we already have. And as we do that, we meet millions of consumers at the point of sale and welcome them into our network. And so ultimately, this core of our business has a very strong growth engine. Over the past three years, it's grown at 32% annually. And as I'm going to try to lay out in the next few minutes, in some ways we think we're still just getting started.
So you heard a moment ago from Michael and Libor about the structural advantages that we have in our business. Those are also the underpinning of the value that we deliver to merchants and distribution partners. That includes our ever growing consumer network and the propensity of those consumers to transact with us. You heard about our credit decisioning, our transaction level decisioning which drives superior conversion and AOV results for retailers. Our data asset supports delivering the right offer to the customer at the right time to drive traffic and again conversion. Our ever evolving models, the power of our models drives ongoing increases in performance but also importantly sustainability of results for retailers. And you also heard about our enterprise infrastructure which delivers the scale that our largest retailers require, especially in their big moments each year. And it also supports the depth and the velocity of our product. And as these structural advantages compound, so too does the value that we can deliver to the merchant network.
So as a reminder, we think about our merchant point of sale strategy in three broad pillars. Signing up new merchants and entering new verticals. Then once the merchants are on our platform, growing our share. And then thirdly, working with distribution partners to accelerate distribution, especially in the long tail. And I'll go through each of these in turn.
So, first, new merchants and verticals. In the past year, we've accelerated our merchant acquisition significantly. We added 157,000 new merchants to the platform in the past 12 months. And we've more than doubled our active merchant count since 2023. And that again is driven especially by expanded distribution into the SMB segment through wallets, payment service providers and ISVs which I'll speak more about in a few moments.
I want to zoom in for a moment on the US enterprise segment which drives the majority of our point of sale GMV. We carefully track the top 250 e-commerce and travel merchants in the United States. E-commerce and travel being the original core markets that Affirm was focused on. So in the past three years, we integrated an additional 32 of these merchants, including many household names that we're very proud to be partnered with across multiple categories of retail, reaching a total of 75. But of course, when we look at this chart, we see more opportunity than
Accomplishment. There's 175 merchants in this sample we have not yet integrated with and that's something that my team is focused on every day. Also important to remember though that we don't need an integration with a merchant for our customers to transact with us there because of our direct to consumer channels. If you look at that 175 merchants that we are not integrated with, we drove $3.3 billion of GMV in the last 12 months with those merchants through our direct to consumer channels and that nearly doubled over the last year.
So if we then look at our market penetration in GMV terms, the scale of how much opportunity we still have really comes into focus. So again looking at these original core markets of e-commerce and travel in the United States those end markets are growing between 2020 and 2025 they grew 1.7 times to reach $1.6 trillion. In the same time period Affirm grew over sevenfold. So, we gain share rapidly, but yet we're not even at a 3% penetration of these core markets. And we think we're far from any sort of ceiling even in these core markets that we've been in for over a decade now.
So, what if we look beyond those original markets? The US consumer spends trillions of dollars more in other areas of the economy where our product is also valuable to them. We see this every day with the Affirm card when somebody uses it to make a health care purchase or to pay for a professional service or to make a charitable donation and we are also now integrating with these types of merchants as well. We have a team that focuses exclusively on entering new verticals and laying out the go-to market strategy and as a result we're growing in these adjacent verticals very quickly approaching $2 billion a year and we think the opportunity ahead is enormous.
So now I'll come on to the second pillar, growing share of cart. We always say that when we sign up and onboard a merchant, that's just the beginning of our opportunity to work with that merchant and to drive more impact for them and for their customers. Share of cart, something we track very closely by comparing our GMV to the total sales of our integrated merchant partners. These figures you see here are again from the US enterprise segment where we've steadily increased our share over time. And in the last quarter we processed 2.9% of those partners' total sales.
This is a very powerful lever. When we look across our total merchant portfolio, every one basis point increase in penetration is worth over $120 million of annual GMV. And to accomplish this, we have a well-established playbook of initiatives and enhancements that we work with merchants to deploy throughout the customer journey to drive awareness, engagement, and ultimately conversion.
And more broadly, we continue to invest in our checkout product with the goal of having the best and highest performing checkout experience available. Last quarter, we announced Boost AI. Boost AI allows merchants to take even more advantage of Affirm's machine learning capabilities. With Boost AI, merchants can work with us to determine the optimal set of program parameters to drive conversion and return on their spend with Affirm. Boost AI has now been adopted by 57% of our enterprise partners, sorry, and rolled out to tens of thousands of SMBs.
We're also rolling out an offering we call connected accounts, and that's where we work with merchants to recognize returning users when they first arrive on a merchant site. We can then make them aware of their purchasing power, affordability, any personalized offers, and because we already know who they are, they can skip steps in checkout for a faster, smoother, higher converting experience. And this is now live with some of our largest merchant partners.
And in the same vein, we're rolling out embedded checkout. The idea here is we no longer want consumers to have to complete the checkout process in a separate window. We want to keep them natively in line on the merchant site. Again, for the most seamless, fastest, highest converting experience we can produce. So, this is a sample of some very recent developments, but by no means are we stopping there with our checkout product.
So when we put all of this together, when we add our share of cart playbook with our track record of merchant retention, we end up with a consistently strong net expansion rate. And over the past 15 quarters, it's averaged 116%. And when we look back at the different vintages of merchants that have come onto our platform, we see solid annual growth in each of them over time.
So the third pillar, accelerating distribution through partnerships. As a reminder, our partnerships take several forms. There are e-commerce platforms where we have integrations with 55 different platforms, large and small. Payment service providers, PSPs, where we have partnerships with 18 different ones. And also wallets and browsers bring us to the checkout as well.
I want to go deeper on PSPs for a moment as these have become a much more important distribution partner for us in the past few years. We're now working with the leading PSPs to bring Affirm to their merchants. And it's more than about just having Affirm technically available at checkout. It's increasingly about working with these platforms on a joint product to maximize our performance on those platforms and increasingly about doing joint go to market to maximize our reach on those platforms. So for example co-selling together to large merchants or having default on motions for the long tail and we're seeing the results. Our GMV originated through PSP partnerships is growing much faster than our business as a whole.
Now PSPs are also bringing us access to ISVs, aka vertical SaaS. SMBs in many verticals now rely on ISVs for a range of software-based services including payments and so often through one integration with a PSP like Stripe or Adyen we can partner with ISVs and serve large numbers of underlying merchants efficiently and we now have over 50,000 ISV merchants live and active on our platform.
And because most ISVs operate outside e-commerce and travel, ISVs have become a critical part of our strategy to enter those adjacent verticals that I spoke about a moment ago. We're now partnered with leading ISVs in each of the categories you see here. And that includes in it, which we were very excited to launch just a few weeks ago.
I want to close on the PSP topic by highlighting a partnership with Stripe. We started that partnership in fiscal 2022 and we've driven enormous growth together since then. And we've done that very intentionally, deepening that partnership as we've gone along. For example, we've expanded into Canada. We launched support for ISVs a couple of years ago. We became a preferred partner of Stripe which unlocked much closer go-to-market cooperation. We launched in as part of Stripe's in-store terminal product. And then more recently we've been working very closely with Stripe on Agentic capabilities such as their shared payments tokens program. So we're very excited about all of this progress with Stripe. We think it's still very early days given the scale of their platform and we see much more opportunity ahead.
And so for our next segment, we're going to go a little bit deeper on our Stripe partnership. Max spoke with Will Gabri, Stripe's president, for a pre-recorded fireside chat.
So let's talk about Affirm and Stripe. How do you distinguish yourself from others? What is it that makes Stripe unique and special and perhaps relevant to us? How do you choose your partners? How does your unique approach to payment shape who you partner with and how?
Well, thanks for having me. We're excited to be here. Love our partnership. I'd say one of the things that's very foundational to our partnership is that focus on growth, credit being the fuel for the global economy and now Stripe and Affirm coming together to offer super seamless, both for the developers integrating them and of course for consumers adopting them, credit offers right in checkout. And so, it's been probably four years that we've been partnering, but over the past year, we've seen a really, really nice looking curve, and I think it's just the beginning.
We are measuring our scale, the partnership, the GMV of the partnership in billions of dollars. From your side of the fence, what have you seen? How have we worked together? What's been the unlock? And you're right, we were both looking at this graph and boy, it looks good.
It looks really good. Yeah. Probably two primary dimensions. So one is making Affirm ship natively with Stripe. I think that's probably the best way to describe it which is you integrate Stripe and you just get Affirm. Of course you can turn it off but users don't do that.
You shouldn't, it drives a ton of growth, a ton of conversion.
And the other side of that for consumers just the front-end experience of using Affirm on Stripe is hyper optimized. So it's just a couple of clicks. You get your offer right in situ and you're off to the races.
What are you seeing? So you are a platform. You're a platform of platforms. How does demand for Affirm's product appear? What's the shape of that on the Stripe side?
So Stripe is just relentlessly focused on increasing conversion rates for our customers. And so the calculus for Affirm is just very simple. You turn on Affirm and conversion rates go up. Offering consumers just great credit products right there at checkout just works. So we see across major global e-commerce users, marketplaces like Turo, SeatGeek, it's all the same value prop, just higher conversion, more revenue, merchants are happy.
We've done a really strong push into vertical SaaS/sort of ISV world, which is a place of strength obviously for Stripe and has been from inception. Curious how that has done for you guys as it relates to us but also just generally.
We're seeing SaaS platforms really thrive. As you mentioned, serving software platforms, vertical SaaS for a particular part of the economy or horizontal SaaS for e-commerce platforms like Shopify or Squarespace, that's been something that we've really focused on for the past decade. We have 16,000 platforms running on Stripe and one thing we've seen is that Affirm is a really big driver for growth for these platforms in two ways. So one is it drives conversion. So you just have more success at checkout. So you're an e-commerce platform, you have an SMB selling goods to consumers and just those purchases are succeeding more often because Affirm is integrated and then because Affirm is driving that uptick in conversion, the platform itself is actually making more margin and so the platform monetizes better. So it's really a win-win. Consumers are happy, the SMBs are more happy and the platform is thrilled to be monetizing better.
Let us talk a little bit about Agentic. It is the talk of the town. So we will be remiss if we don't address it and you guys are extremely active in the space, have partnerships with just about everyone. What are you seeing? What's real? What's not? What's coming tomorrow? What's coming who knows when?
I think it's hard to overestimate the impact of agents being responsible for the majority of transactions on the internet. And I really think they will be. I just think that the experiences of delegating slogging through websites and forms and so on is coming, whether it's browser automation or new protocols. The big insight is just that rather than our fingers and eyes navigating the internet agents are going to do it for us. For us in our partnership, it's really just how should we think about credit and conversion on new surfaces. And these new surfaces aren't necessarily the same shape as the ones we've seen in the past. One of the things that I'm excited about in the partnership is to work with a highly technical company like Affirm to figure out how should payment methods be exposed to agents? How should we think about how they're integrated into hybrid experiences where humans are in the loop but agents are maybe initiating transactions. What's next for you guys? Where are you headed?
One of our major priorities is always to accelerate the rate of global expansion for businesses. And so one thing that we're doing together is we're going to the UK together which is great. So Affirm in the UK on Stripe is going to be exciting.
Always good to always have another. About our merchant point of sale business which is as Wayne mentioned our core business today and still by far the most amount of GMV that we're generating. We're now going to shift gears a little bit and move on to some of the product initiatives that we believe will be our growth drivers for the future. So I'm going to invite on stage our chief product officer or head of products Vishal Kapoor. He's going to talk to you about the combination of the Affirm consumer ecosystem the cornerstone of which is Affirm card. He's also going to talk to you about our more recent efforts I'd say within both agentic commerce as well as some other initiatives we have. So with that we'll play a short introduction video and then he will take the ball from there.
All right, folks. My team would like to remind you that no music artists were harmed in the production of that video. That was all AI generated by me over the weekend. So, if you liked it, you can give me credit. If not, then we can move on. All right. Wayne just described the first chapter of our Affirm. That was how we built a powerful business for our merchant partners.
The next chapter for us is putting Affirm in every hand, in every wallet, in every shopping conversation, and every banking app. I'm Vishal. I lead the product and design teams here at Affirm. And I'm excited to tell you four bets that are going to take us there. First, with Affirm card, how we are reimagining a card credit cards wish they could build. The second is we take that same card and we put in every single digital wallet out there. Third, how we're not just situated to play in agentic commerce, but how we are situated to actually win it outright. And the last, how we will integrate our Affirm structural advantages into a place where millions of Americans already bank, which is with their trusted banking partners.
These are four structural bets. It leads to one outcome which is how Affirm is going to be the consumer payments network of the next decade and plus some. Let's start with card.
You've heard a bunch about how Affirm started as an online checkout button. It was a beautiful button. A lot of customers used it across a host of different merchant partners. But they came back to us with one singular question that defined this next chapter for us. And that question was where else can I use Affirm? So we listened. We did a bunch of user labs and then we built this beautiful thing that you see here. This is the new version of Affirm. This is an Affirm that you can take everywhere you go at the terminal in your wallet and you can use it online or in store. And customers have been loving it. Don't just take my word for it.
Look at the ways that we have actually taken the structural advantages and combining them into a thing that no one else can replicate. The first is the purchasing power. This is not a static limit. You don't have to call in for an increase. It actually works for you because it's powered by real-time underwriting that happens on every single swipe. Second is we give you total flexibility. You can either pay now, you can pay later, you can pay now then decide later. For every single swipe, the choice is the consumers, not the issuers. And last, because of our vast merchant network that we have heard a bunch about, we can actually personalize offers, deliver them to your inbox without any caveats, without any fine print, real value delivered. These are the three structural advantages in motion and it comes alive through the way of the card. No other card in the market does it today and we feel we have a very good position in terms of how customers are loving it. Let's look at some numbers.
We're seeing the 4.4 million active card holders are spending $2,400 annually on the card and that's growing about 130% year-on-year. That's a really tremendous trajectory for where the product is right now. But that's not all. When these card holders take on the card, we see them spend three times more across Affirm than non-card holders. That translates into $3,900 of total card holder spend across the network. And 16% of these customers are Gen Z. So that means that a sizable amount of our population is choosing an Affirm card over traditional payment methods right from the get-go. This is our highest growing product and it's our most profitable product and we are just getting started.
So if you look at this, this is one of the most important charts that we obsess about at Affirm. There's a quartile spend on the card. What you notice is that every single line is stacking on top of each other, which means that we're not just adding more card holders every quarter, every year. These card holders found more value in Affirm. So, they're using it more because we are giving them more access to merchants. We're giving them a better product. We're giving them more purchasing power. All of that stacks up in more card holder spend in the network. This is really important because in any product market fit question, you actually look at is the customer happy? Are they coming back? Are they using it more? Are they spending more? The answer is unanimously yes. All right.
So, what is our big opportunity ahead of us? Well, we think it's actually very massive. We have a clear path of going from 4.4 million actives into 20 million actives. And that is not by paid acquisition. That is not by paid marketing. We are going to serve the customers that are already in our file. You heard Michael and Libor talk about 71 million underwritten. Half of them have transacted. Those customers are our future card holders. Second, we see their spend annually going from 2400 more than triple to 7,500 in the longer term because we're going to give them more features, more value, more products.
That two stats lead us to believe that we have a clear path to getting to $150 billion annually in terms of total card holder spend. Let that sink in for a second because that is some gigantic number but we have a clear path to getting there. Let me show you three specific ways that are going to happen soon that get us there.
First is that our app and web properties are already shopping destinations. Our app in the US is one of the top shopping apps and we see that customers come to the app to manage their payments but they stay to finance their next purchase because they're looking for a better way to pay. They're looking for an offer. What that translates into, Max alluded to it a little bit as well. We have 15 million actives onto our direct to consumer properties. Our apps, our web, they see 15 million active every month. 1 million of which are completely new. So these folks are hearing about us from word of mouth from their friends organically maybe searching for us and that leads into 4 million checkouts every single month originated from these surfaces. We also have 10,000 merchants offering specific deals and that number is growing every day. But what that means is that our app is already a destination. Our web is already a destination and that destination is a chance to distribute more cards and give more value to customers.
And when we turn that destination into a moment, amazing things happen. So last fall, we tested and experimented our very first 0% days to see whether we can turn actual demand into something that can scale. And it did. It was very popular and we saw some amazing numbers. We saw 60% more 0% take up in offers. We saw 30% incremental GMV without pull forward, what Max was alluding to as well and one of the most interesting stats we saw was that 25% more prime and super prime card acquisitions happened during that time period those days that we ran those offers. All of that was the network working in concert with each other merchant funded offers deep customer engagement take up all going round and round in the flywheel leading up to these amazing numbers.
And because the price for good work is more good work is what we say at Affirm we are going to do it again we're going to do it in a way that leads up to more offers. So we have 70% more offers in the ecosystem. We have 60% more card exclusive offers. So that means that if you're a card member, you get access to these things that you wouldn't otherwise. And we are seeing the emails as well as the communication we are sending to customers already being very sticky and very engaged. We couldn't be more excited. Try it for yourself tonight. It starts tonight and it runs for 3 days. Buy something that you're on the market for. It's 0% APR. It's a very good deal. All right. Now for an interlude.
Does this scene look familiar? This might actually have been the scene some of you had to bear through while coming to this event. This is the late fees credit card industrial complex doing its job. They lead you to believe that the annual fees that people pay for their credit cards is worth it. They lead you to believe that credit cards are beloved forms of payments. They lead you to believe that rewards and points is the religion that everyone should find. The reality is actually much starker.
This scene is being played out in many airports in many lounges which means that you're paying thousands of dollars sometimes to a veil of no rewards. You get spreadsheets to model out how much you should be spending on which category to get the right amount of points. Then you have to do more math to see where you can use those points. Those points have breakage. They have fine print. It is a wild wild west out there in terms of the credit card industry is trying to figure out what a loyalty program should work for the credit card industry, not for the consumer. So we at Affirm we wanted to take a sledgehammer to that. We wanted to say what if we reimagine this from the ground up.
So first I'm very proud to announce that in the coming months we're going to launch a loyalty program for our card holders to give them two value props. One is exclusive offers. We just talked about this, but instead of doing this once a year or twice a year, we're going to have daily offers available to card holders that is powered by our merchants. This is something that only Affirm can do. So, when they go into the app, they will see either a 0% or a longer term or something that is customized and personalized to them. The second is they will get more purchasing power. That's another thing that we hear a lot of time from our customers. So, as you get the card, you use it, you pay it, you link your bank account so we can underwrite you with cash flow, you get more purchasing power, something that works for you. Both these features are going to come to all card holders for Affirm for a grand price of $0. And we believe with this engagement that we drive and the value that we provide, we're going to see a lot more card holders being happy and rewards working for them. All right.
The last thing as a product person, one of the key things that gives me satisfaction is building amazing experiences. Not just for the sake of it, but because better experiences lead to better engagement, lead to happy customers. So, I'm very proud to say that in the coming weeks, we're going to redesign the app from the ground up to give better access to our customers in terms of sign-in and sign up. We're going to revamp the home tab so they can easily navigate the app from the information architecture perspective. And most importantly, we're going to have a new deals tab where customers can come and find personalized offers just like 0% days and figure out where they can spend their well-earned dollars. And that's not all. We're also going to take the card and we're going to redesign it. You might find a memento in your lanyard today. That is the design that we're going to ship to all new card holders. Because we believe that better design leads to better customer engagement that leads to better outcomes and the flywheel goals. So what I just showed you are three important things. More card holders, spending more, happier customers that lead us to feel how this card opportunity can be super big for us. All right, now that we've talked about card, let's talk about wallets.
Wallets are eating commerce right now. This is the biggest shift in payments that we're seeing in 20 years. And our customers are asking us the same question they usually ask, which is where else can I use Affirm? Can I use it within a wallet? So, we see these secular trends take shape both for ecom and also in store and customers are looking for us to provide this value to them instantly where they're shopping. So, we listened to them and we got to work. We partnered with the largest wallet providers in the world. First, we partnered with Google in Jan and integrated with Google Pay. Second, we partnered with Apple with their iOS release and integrated into their Apple ecom. Third, we went back to Google again based on popularity and demand and built this amazing Google Chrome autofill feature for Chrome which is one of the best hidden best features that we have. And then last but not least for the last iOS, we introduced the power of Affirm right at the heart of in-store. These are four cornerstone launches that we have done and the customers have been loving it. Let me show you how.
First, we're seeing some tremendous volume in the trailing 12 months. $1.7 billion in GMV used by 2.3 million customers and we're seeing 155% year-on-year growth. But that's not all. The biggest thing here is that product market fit wise, once these customers use it, 70% more TPVs arise. That means that they're coming back over and over again because wallets are sticky, Affirm is stickier, and the combination of them is explosive.
One stat I will want you to leave on this slide. 80% of the volume that I just described is coming from unintegrated merchants. What does that mean? That means that these merchants were previously inaccessible to Affirm and now through these wallet partners, we're able to actually serve our customers wherever they're shopping and we're generating incremental volume for Affirm while serving these customers.
Okay. No story about wallets would be complete without in-store, which is the final frontier we believe for a company that was born digital native. We are seeing with our wallet partnerships a 165% year-on-year growth. But more importantly, we are seeing a 4x growth in categories like restaurants and dining and 3x increase in gas and services because customers are choosing us to transact in offline environments in categories of everyday spend. This is a leading indicator for why we believe that with Affirm in these wallets, we are uniquely positioned to win with our structural advantages because we are building and providing better value to these customers. All right.
Agentic. A lot of ink has been spilled as we say about the future of Agentic Commerce and how it's going to take shape and how customers and merchants are going to engage with it. We at Affirm instead of taking shape the prediction game we're trying to actually listen to our customers and anticipate what this is going to be because we believe that agentic commerce is already upon us. Let me show you a little bit why.
Agents are going to take away the drudgery out of shopping. So right now if you're on a shopping website you have to go and search for the item. You have to look at the different prices if you choose to. You have to look at reviews and then you have to pull up a credit card maybe and then you have to complete the whole process and then you buy the item. There's a lot of mechanical things that happen today in terms of shopping. The thing that happens when you remove the drudgery if you believe that is that two things get elevated. Your affordability as well as access to credit and trust. These two things cannot be disintermediated by an agent. This is a truly human thing that will continue having its place in any shopping environment. We truly believe and if you believe that Affirm is uniquely situated to win this entire category because over the last 15 years we've been building underwriting that is real time in nature and we building affordability components that are easily read and understood by agents. Agents will reward products for their humans which are transparent, which are easy to understand, which are honest. They will punish things that they cannot understand like compounding fees or late fees or interest. Those are things that the agents are not going to be looking for when they're recommending options for their customers. So the up-funnel messaging that we built is one of the most popular products because it helps customers make informed choices. And then purchasing power which we have talked about. It helps you assess determine in real time whether this thing is right for you.
So what we're doing is operationalizing these structural advantages in three different ways. First we are shaping the standard. We just announced our partnership with Google in the morning. We have signed with Stripe and we're working with Shopify. Three important key players in this agentic commerce history. Second, we're taking what we just described on affordability components and purchasing power and custom making it for the agentic protocols because unlike the credit card drill that we had to retrofit our first version of Affirm in this version when we shape the standard we can build them native for the agentic journeys and then once we have the first and the second we're going to make it ubiquitous. So across the biggest LLMs like Gemini and our marquee partners like Priceline, Nectar and Newegg and many many more. We're going to be everywhere where commerce is happening. Everywhere where shopping is happening.
Let's take a specific example to walk through how this would look like. So take a journey with me. Meet Alyssa. She's a mom. She's a world traveler. She's looking for her next vacation. She's looking for a vacation to a theme park in the summer like many of us. But affordability is also very much top of mind for her. She's looking to have this dream vacation but make sure it fits her budget. So she goes to Priceline. She starts her purchasing journey there. She talks to Penny, which is Priceline's agent, and asks, 'Where can I find some hotel rooms for my particular budget within walking distance?' Penny goes hard to work, find some options. Those options are great, but they're a little bit over budget. So Penny asks Alyssa if she's open on the dates and Alyssa wants the same dates because that's what works for her family. Then Penny goes hard to work again and suggests Affirm as an option because we are a proud partner of Priceline and that shows up in a way that is very clear and understandable to Alyssa to purchase these hotel options. These hotel options would probably not have been consummated if Affirm was not an option here. But what you saw is that discovery as well as financing happened in the same surface and Alyssa was able to buy the particular hotels at her price point in a confident way. That's what Affirm does. We turn hesitation into confidence.
Second, now Alyssa goes to Gemini to find some headphones for her son because she's looking for an easy way to purchase this and Google search is powering the search results here. At the same time, Affirm is going to be front and center while Alyssa tries to purchase these headphones. And because Alyssa knows Affirm is an honest way to pay, she prefers that breaks the payments, tries to smoothen the payments to match her cash flow. And we're also going to enable Gemini to serve these options in a very easy and transparent way. So now that the trip is booked, headphones are bought, and a few weeks have passed, Alyssa has been paying off her loans, she goes to the Affirm app to make sure that everything is good, everything is paid off. It is. And the purchasing power goes up because she's paying her loans back and she's on the lookout for some point and shoot cameras, but she's not sure. She doesn't know if it fits her budget. So, she goes to the Affirm search, starts a journey on I'm looking for point and shoot cameras. Are there any deals going on? And this is something very specific about Affirm. Because we integrate with a lot of merchants, those merchants can surface deals and offers in a very customized way. In this case, Newegg is running a particular promotion. They can actually target folks like Alyssa and saying 0% only for you as a welcome offer let's say or a promotional offer and Alyssa can use that to just buy the camera right from the Affirm app. So what did we see? We saw three surfaces same Alyssa trip booked headphones bought cameras bought all through easy discovery through easy purchases and honest financing. That is how Affirm is going to not just play in this space but go and outright win it.
Okay, we're not done yet with agentic. We're working with the major players and there's more to come. This is just a sneak peek. All the things we just showed you are going to be in production soon in the coming weeks and months and we couldn't be more excited about it. All right.
So now we have looked at card, wallets, and agentic, three surfaces one through line that Affirm is going to become the preferred way for customers to pay. But there's one last surface that we haven't discussed which is the banking apps. There are 130 million Americans who use their trusted banking app to conduct their business. These same customers also tell us their financial life is complicated and honestly fragmented. They don't want one more app. So we listened to them and we thought of ourselves what if we could bring the best of Affirm right where the banking is happening. So we did something about it. I'm proud to introduce Affirm Edge in which now in the known and trusted banking apps the same Affirm people trust and love can conveniently be hooked in. You can see your purchasing power. You can access all the offers that we were talking about in terms of specific needs that you might have and it all comes in a way that is very easy for customers to understand and very easier for issuers to integrate with. With that, I'm going to hand it back to Wayne to talk about how this will look on the issuer side. Thank you.
Okay, we are very excited about Affirm Edge and the opportunity to enable banks and credit unions to deliver BNPL to their customers within their products on their surfaces. And we often get the question, how big is the potential opportunity here? We think it's pretty big. There's different ways to estimate it, but when we look at the consumers in the United States who are debit first, who prefer to use their debit card, and we also look at the percentage of users who prefer to lead with their mobile banking, that's how they prefer to interact with their bank. And we assume about a $2,000 a year annual incremental spend. We come up with $140 billion annual addressable volume opportunity. And through our initial partnerships with Fiserv and FIS, we're able to serve a significant portion of the issuers in the market and the card holders as well.
So with Affirm Edge, we've been hard at work developing a super strong value proposition for the issuers who partner with us. We've had the opportunity to engage with banks and credit unions of all different shapes and sizes, and these are some of the value drivers that have been resonating. First, it's very attractive for issuers to be able to keep BNPL transactions within their ecosystem to engage their own customers that they've had these long-standing trusted relationships with. Issuers can also earn additional revenue not only through incremental transactions that they capture, but also through flexible credentials that are available from the leading networks. Third, issuers get to take advantage of Affirm's leading BNPL offering, which you've heard a lot about today. And a key part of that is our merchant network and the offers such as 0% APR that they fund. And those will be available through Affirm Edge as well. And then finally, but by no means least, we're working very hard to make this offering as easy as possible for issuers to integrate and operationalize. We're doing the work so that they don't have to.
But you don't need to hear it just from me. For our next segment, we're excited, very excited to have the opportunity to hear directly from some of our partners about Affirm Edge. Please welcome Erica Celich from Fiserv and Phil Laner from Old National Bank.
Okay. Well, Phil, Erica, thank you so much for joining us. It's really awesome to have you here to talk more about this. Maybe if you could both just briefly introduce yourselves, your role, just to give the audience a sense of your perspective on this.
Sure. Phil Laner. I am president of consumer lending at Old National Bank.
Hi, Erica Celich. I'm the senior vice president of card strategy at Fiserv.
Great. So, maybe Erica, can we start with you? So, we obviously announced our partnership on this earlier this year. We're very excited to join forces with you. And can you say a few words about why Fiserv pursued this partnership and kind of why you think now is the right time for this type of offering?
Yeah, for us it was really about how do we meet consumers where they are today. We know buy now pay later is now making up something like 6% of US ecom transactions. We want to be able to bring that flexibility into the existing debit card. So, we want it to be on their current payment instrument as opposed to having to have a new one. We see an opportunity for debit to not just be sort of a utility as it is today where you pay for everyday payments. We wanted to be something a bit more strategic. And the Affirm team really has proven that you can do that with the debit card. So, that was sort of the reason why we were interested in this. Now, and then of course with Affirm, number one, I just generally love the team. I think you guys have all seen them today. A great team to work with. They also have proven their product works at scale. So that was something we were interested in. And then lastly, it was really all about this responsible credit offering. So a lot of our banks and credit unions, we have over 3,000 of them that process on our platform, they don't like the idea of bringing buy now pay later and saying we're going to charge you all these fees, right? We want it to be accessible in a responsible way.
Thank you. Phil, maybe turning to you. So you've obviously been in the banking sector for many years. You've seen the development of this whole BNPL thing. Be interested in your perspective on how have you seen the growth of that product and kind of what kind of adoption you've seen in your customer base.
Yeah, our customers are using it plain and simple. Last year we did over 60 million in transactions through buy now pay later. Currently today we have 40,000 customers that have an active pay plan with buy now pay later. So our customers are already using it. So for us, it's how do we get into that transaction so that customers are thinking they're doing that transaction with us at Old National Bank and thinking about us first.
That makes sense. And so obviously we and Fiserv came to you with this idea. Is there something about this offering that's attracted you?
Yeah, it's simple. I think we've talked about this for a while now at Old National. Like is this something we can do on our own and build on our own? It would be quite a lift to be able to do on our own. So partnering with somebody like Affirm who's been in the space a long time, you had mentioned in your introduction about the merchant network that you have, that's not something we'd be able to replicate in any time if ever. So it makes perfect sense to partner with Affirm. And then with Fiserv, we've been working together for a very long time. Partners, not a customer vendor type of relationship. We really think about each other as partners. So when they came to us with this offering, it's a no-brainer. It makes perfect sense for us.
And how about you, Erica? You've obviously talked to a number of issuer partners in addition to like what kind of feedback have you received about this idea?
Yeah, I would say it's pretty consistent to what Phil just said. They have seen we looked at our overall transaction base. So we process 25 billion transactions a year on this debit processing platform that we're talking about here. Buy now pay later transactions make up about 1% and that's card present card not present. So it's something that we're seeing widescale adoption and the banks and credit unions want to participate but of course they want to have it in their own ecosystem. So for them this is a no-brainer solution particularly on debit. You see a lot of this on credit but less so on the debit side. So lots of demand. I think folks really like that we are doing the heavy lifting. So as Fiserv we have not only the integrations with Affirm and we call on the off-stream we have work with Visa and Mastercard we also have the mobile front end with all the digital providers so we can bring to life the solution that you guys saw in the video pretty rapidly they don't have to do much as well as the credit underwriting and servicing will be done by Affirm.
And Erica I think you've been pretty enthusiastic that once we're out of the gate we can have pretty widespread and potentially rapid issuer adoption like what do you see as kind of underpinning that potential.
Yeah, I think a couple things for us. The first is just I mentioned the scale, right? So we have no shortage of issuers, over 3,000 that process directly on us. Many of those use our mobile front end, 25 billion transactions a year. So the scale is there. The Affirm card has also shown us one of the biggest things that we wanted to do this year and a lot of what you'll see coming from my table is how do we make debit more of an engagement tool versus just a utility. So you guys really proved, part of the business case we had to work on together was how do you make a debit card, how do we drive higher transactions? How do we drive more spend and usage and deepen that engagement? And that was really the core of why we think this is going to be successful.
And Phil, do you have a view on, if you add this to your portfolio and you have BNPL and debit, how it might change the role of debit kind of in your product lineup?
Yeah, I think it moves from just transactional to strategic. Customers are not only going to use debit card for those short everyday basic purchases, but think about the longer term purchases or the more strategic pre-planned purchases. So we're firm believers that we're going to get many more swipes with our debit card and it gives it the flexibility to truly be top of wallet. You don't have to wonder if you need to pull out a credit card or debit card. This one card can do it all.
And if you think about it alongside your credit card offering, do you worry at all about cannibalization? Like how do you see those two products going?
Not at all. As president of consumer lending, I get asked that question a lot internally at the bank, like are you worried about that? But no, we want our customers to transact with Old National Bank. That's debit card, credit card, traditional lending products. It doesn't really matter. This really just gives our customers more options. The younger demographics as well seem to be debit card first users compared to previous generations that used credit cards more often. So this is just a perfect option for us to put into our offerings.
So maybe final question for each of you. If you look ahead a couple of years, what does success look like here for this product, this offering? If you think about for your own businesses and then for the consumer ultimately.
Sure. Again, top of wallet. So our debit card is top of wallet. Customers could use our cards for everyday transactions and those pre-planned transactions. Everything is integrated into our mobile app, into our ecosystem. So customers don't need to worry about going to a third party or a different app to do their transactions or which card they're going to pull out. So for us, success in a couple years is customers thinking Old National Bank for all of their transactions with the one debit card.
For us, it would be obviously widescale adoption. So we'd love for Phil and all of our issuers to participate. We've got over 200 million card holders in the US that work off of or have cards on Fiserv processed platform. So that would be a huge win. Debit on BNPL just generally as a standard payment form would be amazing here. And then really thinking about debit as a more strategic instrument rather than just the utility which I described. So I think all of those would be and then of course responsible lending. I think that's one of the nice things. We see this really as a cash flow management tool rather than another form of credit. So that's something we think is really valuable for our issuers.
Okay, we'll leave it there. Thank you so much for coming.
Thanks for having us. Thank you.
Slight change of stage here. I'd like to say thank you again to Phil and Erica for participating in our fireside chat.
chat. We really appreciate their time. Okay, for the next section, we're going to give an update on our international expansion initiatives. And to do that, I would like to introduce on the stage Pat S, who's our senior vice president of revenue. Pat.
Thank you, Zayn. Always glad to be the final act before the main event. But in any case, my name is Pat. I'm the senior vice president of revenue at Affirm. And I'm so excited to speak to you today about our international expansion, our progress, and the opportunities that lie ahead.
So now you just heard from Wayne and Vashall and they talked about the opportunities we have to land and to deepen and expand within North America. And beyond that, there's still a significant amount of opportunity. In fact, more than $5 trillion of e-commerce and travel spend occurs outside of North America. And shortly after our last investor forum, Shopify came to us and said, 'We have a problem. International is our largest growth vector, but the markets are very fragmented.'
In every country, there are multiple local providers, disjointed customer experiences, and subpar underwriting and technology. They wanted a single trusted partner that could simplify the complexity and deliver a better experience globally. And that conversation was not unique to Shopify. In fact, we heard the same thing from many of our largest partners and merchants. 72% of our top merchants actually operate globally. And so you see we have the opportunity, we have the demand and in February 2025 we announced our exclusive partnership with Shopify to launch in Australia, Germany, France and the Netherlands and that along with the EU opens up over $1.7 trillion dollars of addressable TAM.
So why are we well positioned to expand internationally? Well, first we have the technology. We have the best underwriting in the industry. We have a proprietary risk infrastructure. You heard about the 14 years of investment in our risk models as well as the transaction data. So, this gives us a significant head start into any market that we enter. We're able to localize our proven infrastructure and adapt quickly with the local signals that we have. Next, we have just the global scale. There is no provider that provides such global scale and consistency the way we have. No one else works with the largest e-commerce retailer in the world. And over the last decade, we've built systems that are designed for that reliability, consistency, and the operational rigor necessary to operate on international scale.
But most importantly, I want to talk about the customer value proposition. Of course, transparent financing with no hidden fees really resonates across markets. I think that's sort of a universal, but in many international markets, there's not a lot of flexibility or a lot of financing options to be honest. You see, especially in the UK and Australia, paying three, paying four dominates. What we've done is we've actually made all the necessary investments technologically, we got the regulatory relationships in order to be able to offer longer-term options to be able to offer monthly payments and really be able to offer a full suite of financing offerings for our merchants across the board. And so when you see that all of this helps drive higher conversion, larger basket sizes and better merchant outcomes.
So how have we proven all this? Well, we started in Canada and I want to talk about our progress in Canada. We've been in market for several years and you can see we've launched and signed a number of merchants both in the US and expanded as well as local partners there.
Now I want to draw your attention to the slide on the left. You can see that in April 2025, we launched with Shopify and you can see the pace really accelerated. In fact, we saw 7x growth of our merchant count to 26,000 merchants in 12 months. So, very exciting growth. And what we learned was that launching with a distribution partner can really accelerate that growth and derisk your entry into certain markets. And so, as you can see with this rapid scaling, we've also signed on a set of additional distribution partners to continue to grow within Canada.
So we took those learnings and we took it to the UK and in September of 2025 we actually launched much earlier with Shopify and again you see the rapid growth 10,000 active merchants 260,000 users in only a couple quarters. So again, distribution scale and this gives us a tremendous amount of local momentum to address the $230 billion of TAM in the UK. And so we've already signed a number of select UK commitments and many more to come that we'll be announcing over the next several months.
And so we have a consistent repeatable playbook. We land, scale fast with existing partners. We also expand growing merchant adoption both locally and with the merchants that we have in place. But I'm especially excited about this idea of deepening. So all the products that you saw between the card and the marketplace as we continue to grow our consumer network and continue to grow our merchant network. Those two flywheels also help in enabling that growth. So we can introduce these products and market in the same way we have in the US deepening and strengthening our penetration within these countries.
And so tying everything together, we have three major work streams. One is obviously launching with Shopify in Australia, Netherlands, Germany, France. We continue to expand our global partnerships as well as signing new merchant partnerships within the regions. And then we continue to make investments on that structurally advantaged platform. The platform from a technology perspective, our regulatory relationships in order to be able to be compliant in market and then obviously our consumer benefits and our consumer products that we can introduce over time. And so all this just builds on the flywheel and the structural advantages that we've talked about all day today.
Now to close, I wanted to just talk a little bit more about the Shopify and Affirm partnership. And I know we've talked about it at good length here, but I think it's really important to underscore how much this partnership really drives growth for both parties. I mean, it is true competitive advantage in terms of distribution when we launch in any market. It derisks us as we enter those markets. It also derisks the partner as well that they can go with a proven partner like us. And so to date, we've done over $20 billion in overall GMV and there's still much more opportunity to come. And so to close, I wanted to leave you with the perspective from Shopify with Harley Finkelstein, Shopify's president.
Hello everyone. My name is Harley Finkelstein. I'm the president of Shopify. And I know of course today is Affirm's investor forum. So I thought I'd jump on here and share some of my thoughts on what's been an incredible partnership between Shopify and Affirm and also to tell you how much opportunity we see ahead. To start, Affirm supports us with one of our most important products and one of the most important parts of Shopify, which is called Shop Pay. Shop Pay has now been used by over 200 million consumers all over the world and unofficially I think it is the world's favorite checkout. I'm really proud of that and it is critical for me that it stays that way and that is why I think Affirm is such an important partner to us here at Shopify and to me personally. Through this partnership, the world's favorite checkout now offers the world's best buy now pay later product with Shop Pay Installments, which is of course powered by Affirm. We launched this partnership together in 2021, and to date, we've facilitated over $20 billion in purchases together. So, it's been a huge success, especially in the US, and now we are rolling this out to more places globally, which is really exciting.
We've already expanded to Canada and the UK and now we're rolling out to new markets like Australia, Germany, France, and the Netherlands. So, we think the opportunity for us to keep working together just keeps growing. Now, around half of Shopify's merchants are based outside of the US. So, this partnership to expand has so much potential to merchants all over the world and offering them fair and very transparent credit and also helping our merchants grow their business, which is the business that we are in at Shopify. So, I just want to say thank you to Max and the entire team at Affirm. It's been an incredible partnership. Often in technology, you don't see a lot of companies that work together that are so aligned from an ambition perspective, from a mission perspective, but also from a technical chops perspective. And we are wonderful partners and we think the world of the folks over at Affirm. So excited for what we're building ahead. Enjoy the rest of your day. And to Max and the Affirm team, congrats and let's keep going. See you.
Okay. We appreciate the kind words from Harley. We're now going to begin our first question and answer session. So I'm going to invite back up on stage several of our Affirm speakers that have spoken already. We ask that you not ask any financial questions yet because we haven't given the financial update yet. I know it's hard to resist, but you'll just have to wait until the final Q&A session. So we're going to bring the chairs up here. You'll have six of our management team members and I'll moderate in terms of the rules of the road.
Rules of the road. So, for those of you in person, we're going to be walking around with two microphones. Maggie, if you don't mind getting one, I guess Helen, too. Megan, so we'll have two microphones if you want to ask an in-person question. If you're watching this virtually, we ask that you email us at
[email protected]. We'll try to mix in questions from both here in the audience as well as online. Again, just to reiterate, please do not ask financial questions. We're not going to be able to answer them yet because we haven't given an update to the medium-term framework. We also ask when you ask the question, please indicate both your name as well as the company that you represent. That's important for our transcript purposes.
Okay. I think we're ready for our management team members. Where are we going? Let's see this one over here.
Okay. Does anyone want the brave person that goes first?
James Faucet, Morgan Stanley. Appreciate all the details today. One thing that has always left me scratching my head a little bit and you mentioned a couple of different points and this is this idea particularly that as you've tied it to the card, the purchasing power concept. I'm just wondering if you can talk through a little bit how the purchasing power is arrived at, particularly as you're trying to do transaction-based underwriting, and then would love to hear as people become aware of their purchasing power, especially with the card, how that changes behavior. Thanks.
Well, I mean, I think a lot of obviously people have a tendency to compare it to limits, right? The card limits. One of the things that we want to be able to communicate to consumers and be able to do it clearly and consistently is in the moment how much purchasing power do you have left? That can change based on obviously what kind of purchases you've made in the past and not only are we actually now underwriting at every transaction as a part of the transaction, we're actually doing the same as soon as the transaction is completed to understand what the individual's purchasing power is going forward. It changes based on things like duration, right? Shorter loans, larger monthly payments have an impact on purchasing power. Obviously things like repayment or lack thereof have impact on purchasing power. So it is a mechanism for us to be able to communicate with the consumer about in the moment what is their purchasing power based on the data set at a given time.
Hi, Ramsey Lal from Canaccord. Thanks for taking my question. I had a question about underwriting in an agentic commerce context. Seems like agentic credit including buy now pay later is a little bit of a different paradigm where the bot in some circumstances might make the purchase decision but then the owner of the bot is stuck with the payback obligation. Hopefully those two things are in sync. But I guess my question is in terms of underwriting there, do you see a different, you know, is your historical data and your models, how do you prepare to underwrite that? Can you leverage the data that you have now or is there going to be sort of an air pocket for the industry where you're trying to season models with new classes of data basically?
Well, I mean, it doesn't exist, so we don't have data on it. But I mean we do think that it will actually result in more data, richer data. The initial work we're doing with Stripe, with Shopify, with Google, and including our own first-party CLI for agents to use and interact with us, we are specking out and creating a richer set of data that the agent is bringing with it in order to interact with Affirm as a part of the underwriting process as well as the post-purchase process. So like as you see these purchases showing up, they are going to be distinct from obviously purchases that you are making without the help of an agent. We want people to understand, hey, this is happening on your behalf. Hey, did you know about this? When they go to repay, this is a repayment for a purchase that your agent made. So, a lot of the information that we're going to be using in our underwriting of agent transactions is also there doing double duty to help the customer understand what is going on in the moment as well as after the purchase has been made. So that there's no confusion, there's no issues and so that the customer support process becomes richer that then all of it, as happens today, all that information gets folded back into underwriting. So we're pretty excited about it. Anything where we've looked at where we're getting more data through a channel, when a merchant integrates and starts providing us more data, that leads to better outcomes, better decisioning. And so, anything that can provide us more data is for us, you know, is great. And we already think of the product, the flow, this idea of every transaction is an engagement. That product flow is a data magnet. And then Agentic is only going to accelerate that. So, we expect significantly better underwriting as a result.
If I get a little geographic diversity in here, Jason, you want to?
Jason Cupberg from Wells Fargo. My question is for Max. Max, of everything you've shared so far today, what are you most excited about over the next decade? My guess would be at the last investor day, it would have been card. It was very nascent at the time. Where do you stand today?
Michael likes to claim that I'm from the future. The fact... don't hold my feet to the fire on this one too soon, but the honest answer is the stuff that I'm most excited about, I can't share yet. I know Michael is about to hit me somehow from remote, but part of the awesomeness of having an executive team like this, which I hope all of you got a good sense for who they are and how good they are, is I actually get to go off into a cave and build stuff that will be the next card or the next something that I'll be excited to announce sometime from now. And three years from that point, we'll be gushing how great a product it is. And for every one of those things, 15 die on the shop room floor because they're not good enough. But that is the non-answer of the things that we covered today.
And I think we're dangerously close to making Edge a reality, which I think is just a force multiplier to this whole idea of who we are and how we do business and what we deliver to our consumers. So, it's very hard not to be super excited about it. I'm generally very excited about AI. So, anything touching AI, with AI in it, baked in AI, with AI as a side dish is great. These guys know that one too well. Those are probably the two sort of front and center. But my personal excitement about being at Affirm, leading Affirm has monotonically improved over the last 15 years for sure, if sampled quarterly, but the function has a distinctively exponential bent to it over the last call it three or four quarters. And so there's just a lot of really cool stuff happening. And because of agentic in particular, coding tools, it's a lot easier to find out if some of these ideas are good or bad. And so it's almost a silly question. We'll find out if all the things that I'm excited about are, you know, which ones are going to work.
We actually did receive a question online that I thought was pretty interesting. So, James Sperling from Shay Capital asks, 'Can you expand on Affirm's potential or future appetite to participate in merchant partner marketing automation, whether that be off the Affirm app, in the Affirm app, somehow leveraging the data assets that Affirm has on consumers?' And he also asks a somewhat related question. Do you think that might bring us into competition with our own merchants?
I think there, I'll start and this is definitely the... Wayne, Pat, it touches a lot of just as you sort of analyze it. So there are two questions in that question. Question number one is do we have a product to sell or a value to offer to merchants beyond payment acceptance? And the answer is obviously yes. We are a marketing service as you saw in our app. We are a co-marketer with them on their own services. So there's many things we do with merchants today that precedes the actual sale to help them get the qualified buyer in the door.
Not to sort of unveil too much on the future roadmap but we do have a bunch of things in mind of how might we help them do a better job marketing to their consumers, to their would-be consumers on our own services or elsewhere just because we understand the buyer so much better. Like one of the things that I used to drop, I think I may have actually said this, I don't know if I said it in the last one of these events but I've said it before so it's not a big secret but the conversion end to end from a search in the Affirm app to the actual purchase hangs out in 25%. Which is like the first time you see like oh my god like so Google is like 0.0025 and you guys are a couple orders of magnitude better, that's insane. It's not that insane. People come to our app because they know what they want to buy. We're there to provide credit, but it's still kind of on the face of it is a great number. And so bringing some of that goodness, which is obviously accomplished through machine learning to our partners in other endeavors of theirs, e.g. marketing is a great idea. We're working on things like that and more to come.
On the other side of the question is the so isn't that naturally going to lead you down the route of okay so you have five merchants selling jeans you should pit them against each other and if somebody's searching for I don't know a jeans brand maybe we should be selling them Levi's instead. The short answer is that's not the business we're in and part of why we can serve competing merchants, like very competitive merchants in fact, in the same app with the same product is because we're very good at not pitting our merchants against each other. The business we're in is providing honest financial products. That's what the people who come to our app are there to do. There's not a world in which we say, 'Cool, merchant A, we want to power your sales, but merchant B is paying us too much money to help you. So, we're going to take some of your marketing dollars and route it to the other guys.' Like, it just wouldn't work in our app. It wouldn't work in other services. So, that's not the plan. And I think we've been consistent with that message and consistent with that reality enough where merchants trust us and we wouldn't want to do anything to break that trust. So there's not a competition with our merchants. There's definitely competition among our merchants and we're there to make sure everyone does their very best for our shared consumers.
Andrew Baile from Capital Markets. There was one slide you had where you kind of outlined the top 250 enterprise partners that you're not working with today on an integrated basis and then the volume that's coming from D2C, you know, quite outpacing the rest of the growth in the business. So maybe you could walk us through a little bit further how you kind of see the penetration within that base get unlocked from, you know, using the card on a regular basis when they're not integrated and how that kind of evolves from a penetration perspective.
Sure. I mean look the beauty of building these products in this industry is that the customers love the product so much there's an emotional factor to it. So they come and tell us all the things they want. This is not a mystery when we talk to them they're telling us how much they love it. The same love takes us down that route of Affirm is not integrated on that particular merchant how else can I use Affirm so that's where the card comes into play. But even above that there is this fact that we are able to provide them better purchasing power and offers that they wouldn't get any other way that they're paying for it. That's why the love exists because we can give them a product that doesn't exist in the market so far. So that is what we're seeing both from a wallet that I showed in the slides as well as on the card and 80% of the wallet's volume is coming from unintegrated merchants for that particular reason and we see that penetration just going higher because as people are using those products in those services they're actually coming back on a higher repeat usage which I also showed. So we see that there's a clear path you find a way to use Affirm at those merchants you use it then you use it more and the flywheel goes round and round because you can better underwrite etc. So, we see a clear path of getting there.
And I'll just tack on so we're obviously delighted to be able to serve the consumers on those unintegrated merchants, but make no mistake, we would love to have the merchant integrations as well. And the D2C volume that we do is an exceptional proof point when we're speaking to those merchants to say, did you know in the past year this many customers transacted, this many were repeats, this was the volume, this was the average order value. Here's what we think we could do based on all our prior experience if we were to integrate with you. And so it's often a great lead move to have that D2C volume when we think about the integration path.
Yeah. And then sorry go ahead.
I was just going to say that even though that D2C volume is quite substantial when we're integrated it's a multiple of that. If you think about the kind of friction even going through an app someone gets there has to put that card information into the site. So just imagine the multiplicative effect of being on site.
Yeah. And that we've found is usually due to different consumer populations. Different people think about how they're going to pay for something at different points in the journey. So obviously card users have the card. That's how they're thinking about making that payment. Other consumers think about it only, you know, when they're at the bottom of checkout and selecting a payment method. And so what we see is when we do the direct integration, as Pat said, it's multiplicative. And we have enough of those proof points now to be able to show people the math. And talk to merchants about it and stand behind that when they do.
Dan, I see you way in the corner of the room because your hand up high there.
Hey guys, Max, question for you. You mentioned in the beginning a specific merchant that caused a lot of issues. You want me to ask the other question? No. What would be the tangible benefits if that merchant specifically or any merchant if they actually come back to Affirm? I think it's very relevant, you know, given your underwriting and it's Dan Dolev from Mizuho by the way.
We're hypothesizing. I think from the volume perspective, you know, brings right back to the previous question, the previous answer. It is a multiplicative effect. We would absolutely see more volume. That merchant would absolutely see more volume. Full stop.
The slightly deeper answer. Part of the value we bring to the consumer is affordability and incremental access to credit that is safe. Our structure as a lender, no late fees, no compounding, no deferred. All of that isn't just a great thing for the consumer. It's also a truth teller for us as an underwriter. We screw up, we lose money. We don't get to say like, 'Well, you're late, so we'll make some money on your late fees.' It was like, 'Ooh, we made a mistake. We're not going to make money on this loan at all or it might take too long.' And so, the fact that we keep ourselves honest structurally and always have is a proof point or it's a vector that we are constantly being propelled forward with by asking, 'Hey, we need more data. We need some way of underwriting these people because they're coming to us for affordability.' So anytime we're integrated, it just naturally feeds the model that allows us to say yes more often. Also with deals that are actually specific not just to the consumer but to the merchant and the merchandise. So a loss of a merchant which doesn't happen to us very frequently at all, I'm happy to say, means that we get less SKU level data and we get it in some ways that compensate for the credit losses but the incremental approvals would immediately go up. You would see better signup rates because people would find out that we exist in the moment of saying I'm not sure I want to put this on my debit card and here's Affirm I've heard of it.
So the answer I'm trying to drive to which may or may not be useful to your question. There's actually something that Wayne just said. So we love the idea that card reaches everywhere. We love the idea that we get to ride the long tail of merchants. Like we will never get to some remote village in Thailand and hang the Affirm logo. Maybe we will one day. I don't want to short the option, but it'll take a while before we get to really remote locations and hang our logo on a door, but we don't have to. The card will work there. I use the card internationally all the time. It's quite amazing.
But every time we add another merchant, we are pushing the flywheel forward. And so we will never get out of the business of showing up to merchants and saying, 'Hey, so about that integration, either former or never, we do want our logo here. We want the Good Housekeeping stamp of approval. Affirm works here and works here well. And this is a path for you to offer your own 0% any day of the week you like. You want to do a sale, great. Flip a switch, it'll show up at your checkout completely unbeholden to anybody else's calendar.' So, there's a lot of benefits to being integrated and we're constantly telling merchants, we think you're missing out. There are hundreds of millions of dollars of volume, billions of dollars of volume perhaps sometimes and some merchants that should already be integrated. And by the way, the data quality of that channel does a lot not just for us but also for the merchant. They get to see every quarter a very deep cut into what's happening to these consumers. What are they buying? What are they paying back? What else might they be buying etc. So it's definitely a thing we want. This is I was bragging about the consumer side of the retention. Not even a little bit suggesting that we don't care so much anymore. We care very much.
Thanks, Adam FR from Evercore. Max, a question for you on strategy. You guys laid out a really good supporting case for why you're growing and all the different levers within buy now pay later. No doubt. So, but my question is going forward, do you see yourself several years from now still being single thread buy now pay later or do you envision Affirm becoming a more diversified flywheel? You know, Chime and Cash App for example are showing some really good adoption for different products. Not to say one's right or wrong, but do you see yourself going that way at some point in the future where you're more than just buy now pay later? Thanks.
I love the question. So buy now pay later is not a product. This is something that I would love for the world to fully grasp. It is an observation or a strategic shift in the way people consume financial products. Like it has a weird name and I don't like the acronym and I've tried many times to convince people. Don't call us that. But you know we can call it something. People seem to call it buy now pay later. But what it means to us is financial products and specifically a way to consume financial products. No fine print, no gotchas, no gimmicks, a way to differentiate from prior players. And so in that sense, we're going to continue down the road that we have chosen for ourselves building these honest financial products.
Even if you focused on the P, that is to say pay part of buy now pay later, there's still a lot more road to travel there than just the one thing that we're famous for. So absolutely we'll build lots of financial products and they will all be in this vein of buy now pay later in so far as the strategic shift of consumption is concerned. The specifics of the products are not for me to announce right now but no we're not going to be a single, you know, pay in 6, 12, and 18. But when we launched we were pay in 30 days and that was the only product we had. We've since expanded into I don't know 40 different financing programs that we offer at the point of sale and we have a bunch of other stuff and we have Edge and we have agentic which has some wrinkles to it. So and yet it's all kind of we think of it as the way to do financial services for consumers and by the way we're also more than dabbling in financial services for businesses now too. So the partnership with Intuit is a good exhibit A in that story. Hopefully I can impose the buy now pay later is not just one product. It's a collection of products.
Thanks very much. This is Nate Spencson from Deutsche Bank. I wanted to ask about some of the initiatives to drive share of cart. I think you had the stat on every basis points 120 billion of GMV. Wondering specifically I think that was focused on enterprise. I'm wondering about the long tail of merchants. Some of those qualitative initiatives you talked about Boost AI, embedded checkout, connected accounts. Wondering if the same initiatives are going to apply to the long tail merchant. And then you also showed the penetration in terms of share of cart getting up to 2.7% of the share of cart. Is that kind of like the right run rate to think about going forward or do you think these initiatives can kind of change the direction of that curve and inflect positively going forward?
So I'll start by clarifying the 120 million figure is on the total merchant portfolio. So the one chart I showed that went up to 2.9% was US enterprise but the 120 million figure was the total portfolio. So there's a whole toolkit of things which I didn't bother going over in great detail, but there's like a dozen or more levers that when we launch with the merchant, we're rolling out up-funnel messaging to make sure that that's really clear so the customer knows about their purchasing power. We're talking to the merchants about initiatives like 0% APR and then onto the things that I described like Boost AI, connected accounts, embedded checkout. I think as a broad statement wherever we can we take the things that are working and roll them out as far as we can through the merchant base. It's very common for us to innovate with a big partner discover something that works and then say hey this we know the results now this makes sense let's roll it out as widely as we can. There are certain things where it really only makes sense for an enterprise partner to do because of the ins and outs of it shall we say but where we can we roll it out as widely as possible. And so as we develop these initiatives, we spread them out.
I mean just a little bit more color like Boost AI and Adapt AI both of those came out of work we were doing manually with the very largest enterprises of tuning those programs for them and AI made it possible for us to with relatively straightforward ability to take all those optimizations that took a ton of analysts to do for the largest merchants and say like okay now do it for any merchant of any size. So yeah, we expect those kinds of those specific products as well as products like that to have outsized impact outside of enterprise relative to enterprise.
Just to answer the point about the long tail, we do offer different pricing programs that have different levels of conversion. So for our specific long tail merchants, we have three programs just to simplify it. A base program and then increasingly more premium products that introduce more 0% and increase conversion. So the merchant is paying a little bit more for better conversion ultimately which is a combination of all of the tools we have. Shopify in fact has two programs. They simplified even more. One just introduces a lot more 0% and longer term 0% up to 12 months. And so from a long tail scale perspective just offering a simplified set of programs really allows merchants to choose and opt into more aggressive programs.
