Mattress Firm

Costco and Mattress firm are partnering with Buy Now Pay Later service, Affirm. Costco members can now pay overtime for online cart sizes over $500, and Mattress firm shoppers can also use Buy Now Pay Later when shopping online or in stores across the country. Affirm CEO Max Levc Max, thanks for coming on. So tell me a little more about how t So the great t Some of our transactions go into the kind of APRs you might see in your credit card. Usually we try to do better than that, but a lot of them are actually 0%. And the t We don't charge late fees, we don't compound interest, and when we tell you interest is really 0%, it will not change. It just stays exactly what it is. What you see is what you get with us, and so we're very excited about these partners So how do you make money if you're charging a 0% interest rate? What's in it for the company? Well, we don't always charge 0% interest rates, but whenever you are seeing one of these 0% rates, that means the merchant is subsidizing the transaction. Sometimes it's also the manufacturer. If someone really wants to see you buy that expensive phone, it might be the maker of the phone that is offering to pay your interest for you. But we are a public-economic company, we report our financials every quarter, and we're doing quite well in terms of making sure that we are also beneficiaries of our business. Now, the Cons So are you concerned at all that these programs could contribute to people overspending and going into more debt? I'm quite confident that a firm's program does not. The reason we underwrite every transaction, the reason we speak to you quite explicitly about whether t Literally every time you use a firm, you go into our app or on an integrated website and ask, hey, is t And we tell you, yes, and here's a three, six, or 12 months or et cetera, term length that you can agree to. And we both understand t No, there are no late fees, but yes, you are responsible. And if the answer is no, we really don't We will tell you, we'll be kind and h So consider choosing somet We are an alternative to credit cards, and we take our responsibility very, very seriously. We're trying to make America's cons So how do you determine that? How do you set up these safeguards to try to prevent people with low credit scores, for example, or We look at data available. So there's obviously America is a well-established credit reporting system. We work with all three major credit reporting agencies. We also gather our own alternative data. When we don't know if someone's financial situation is really well represented by the credit bureau information, we will go as far as to ask them to let us peek into their bank account and figure out what we really t Obviously, we can do that securely, make sure we don't store unnecessarily data, but we're able to underwrite every single person, every single transaction, every single time. For what it's worth, I just want to side to the t Many, many times when someone's credit score is low, the traditional credit score, the one you'll find in your credit reports, it is not always, in fact, quite frequently, it is not accurate. It is not representing your true financial state. Part of why a firm has been so popular with 23 million Americans using us and growing very, very quickly, it is because so many folks have a credit score that just doesn't reflect their reality. They're significantly better off and able to afford t And so that's why we've done as well as we have. Affirms also, one of the first by now pay later companies to report to credit unions. Why do that? And do you expect others to follow suit? Is t I t We are excited to offer a more responsible fee free version of credit, but you need to have your credit score reflect your actual repayment history for even heftier purchases That is obtained from the credit bureau. And so for years, we've worked with the credit bureau to make sure that they can incorporate our repayment data responsibly to help folks build the credit So after many years of research, we've announced that we're doing it now and we're absolutely inviting the rest of the industry to follow suit. All right, CEO of a firm, Max Lepc Thanks for coming on, Max. Thank you.