Affirm CEO Expects AI Shopping Agents to Favor Interest-Free Installments

Affirm CEO Max Levchin said the share of purchases paid with interest-free installment loans will grow as consumers delegate product choices to artificial intelligence agents. He said agents comparing payment options could steer shoppers toward loans that spread the purchase price without charging interest. He made the remarks on the call with analysts after the company's fiscal first quarter, held on Thursday, November 5. On the same call, analysts questioned rising delinquencies, and Affirm shares fell more than 9% in extended trading after dropping nearly 8% in the regular session.

What Levchin Said About AI Agents

Interest-free plans accounted for 28% of Affirm's gross merchandise volume (GMV) in the September quarter, while interest-bearing loans accounted for the remaining 72%. Levchin expects the share of 0% volume to rise significantly in agentic commerce. He said about 1 million SKUs in the Affirm app carry brand-funded promotions, in which a manufacturer subsidizes an interest-free loan on a specific item sold through a retailer. Affirm is building tools that would let a seller's AI agent make such a financing offerОфферAn offer is an advertiser's proposal to partners: the product together with payout terms, geos, and traffic requirements, for which the partner receives a reward. to a shopper's agent. Levchin added that shoppers on tight budgets may still choose a longer, interest-bearing loan if it brings the monthly payment within reach.

Levchin also warned that AI commerce will be "more than a little bit messy." He pointed to agents making purchases consumers did not want and to the risk of fraud. He said the company manages risk using data and machine learning, but left open who would bear liability for fraud involving an AI agent.

Delinquencies and Market Reaction

The share of U.S. loan balances at least 30 days past due rose to 2.9% in September, up 35 basis points from June and 9 basis points from a year earlier. The figure excludes short-term Pay in X and Peloton loans. Levchin attributed much of the quarterly increase to seasonality and said short loan terms limit how long Affirm is exposed when underwriting goes wrong. Chief Financial Officer Rob O'Hare said a September test of loan approvals and originations increased the provision for credit losses, and Affirm kept the loans from the test on its balance sheet.

Affirm Card and Key Quarterly Metrics

Spending on the Affirm Card more than doubled to $3.3 billion, and active cardholders more than doubled to 6 million. Levchin said about 30% of card transactions happen in stores. O'Hare said more than 80% of Affirm Card loans have historically carried interest.

Revenue rose 35% to $1.3 billion, above analyst estimates. Transactions and GMV each rose 34%, with GMV reaching $14.4 billion. Affirm said lowering minimum purchase amounts helped lift transaction counts and pulled the average order value down to $258. Active consumers rose 19% to 28.7 million, and active merchants rose 48% to about 621,000. Services volume grew 65%, helped by software partners, while home and lifestyle volume grew 44%.

Plans for the Quarter and Outlook

Affirm plans to introduce card-specific financing offers this quarter and is preparing to pilot Edge, which would make its installment loans available through other issuers' debit cards. O'Hare said the fiscal 2027 outlook calls for at least 30% GMV growth.