Affirm CEO: Recession Will Prove Our Underwriting Smarts

Affirm Holdings has seen its stock down 77% since a November high, but founder Max Levchin is confident that his company will be able to underwrite more customers than any bank, The Wall Street Journal (WSJ) wrote.

“I can swear on a stack of Bibles or your preferred book of choice, until we get through a full recession, I will get partial credit when I show the numbers that I said I will,” Levchin said, per the WSJ report. “But once we’re back in a rapidly expanding economy and we’re still here, still lending money, still controlling our delinquencies, I think I’ll get full recognition.”

He said the company’s lending methods, including standards for credit scores and what people are trying to buy, along with protections against risk, set Affirm apart from other new FinTechs.

Investors have been worried about the future costs of borrowing, the greater amount of competition, and if Affirm borrowers will fall behind on payments during a downturn.

Affirm had tightened underwriting standards in the beginning of the pandemic but began loosening them last year.

The company has recently begun offering more payment plans for smaller purchases; along with easing underwriting standards, this has helped the company add more volume growth.

The company has also made other adjustments, such as recently partnering with ticketing platform SeatGeek, PYMNTS wrote.

Read more: BNPL Provider Affirm Teams With Ticket Platform SeatGeek

Affirm Chief Revenue Officer Geoff Kott said the partnership would “make it possible for more people to enjoy the experiences they want by delivering flexible and transparent payment options at checkout.”

Those using SeatGeek to buy tickets will be able to choose Affirm at checkout and then pick billing options for various installment payments.

Paula Segal, SeatGeek head of consumer product, said in the release that the partnership came about because customers wanted more ease and flexibility in buying tickets for things, particularly with the way people have begun to prefer eCommerce since the pandemic began.