James Fawcett

James Fawcett inquired about the behavior of consumers who come in through 0% promotions, specifically their engagement frequency and attraction to various Affirm products, including interest-bearing loans and the card.

Answer

Max Levchin, Founder and CEO, clarified that 0% offers are high-value and that a 0% first loan does not prevent consumers from taking interest-bearing loans. He noted that consumers using multiple Affirm services (POS, card, Affirm Anywhere) show increased engagement, transactions per user, and total spend.

James Fawcett followed up on the behavior of users who come in through 0% promotions, asking for more detail on their frequency of engagement, product attraction, and how their behavior compares to those who start with interest-bearing or short-duration 0% loans.

Answer

Max Levchin, Founder and CEO of Affirm Holdings, clarified that 0% loans (especially longer-term) are highly valuable and do not preclude consumers from taking interest-bearing loans. He explained that Affirm consumers cross-pollinate nicely across different product types. He noted that engagement, transactions per user, and annual spend increase as consumers use more differentiated Affirm services, such as starting at point-of-sale and then using the card or Affirm Anywhere.

James Fawcett from Morgan Stanley asked about the apparent softness in payment volume per user, whether it's due to 'ungating' initiatives, and any insights into consumer health within Chime's member base. He also inquired about the path of margin expansion, specifically from MyPay loss rates and the Chime Core migration.

Answer

Matt Newcomb, CFO, explained that consistent transaction volumes are observed, but the rapid adoption of Outbound Instant Transfers (OIT) has shifted volume from payments to platform revenue, which has a higher take rate. Chris Britt, Co-founder and CEO, affirmed robust spending among mainstream consumers, with discretionary spending outpacing essential purchases for tenured members, and average balances increasing. Matt Newcomb further detailed that the Chime Core migration is expected to boost gross margin to nearly 90% in Q4, and MyPay loss rates have improved faster than planned, now below 1.2%, targeting 1% in coming quarters.

James Fawcett with Morgan Stanley asked about payment volume per user trends, the impact of ungating features, and any nuances regarding consumer health within Chime's member base. He also questioned the drivers of margin improvement, including MyPay loss rates and ChimeCore's contribution.

Answer

Matt Newcomb, CFO, explained that consistent overall transaction volumes were impacted by the rapid adoption of Outbound Instant Transfers (OIT), which shifts revenue from payments to platform. He clarified that combined purchase and OIT volume grew 20% year-over-year in Q3. Chris Britt, Co-founder and CEO, stated that despite macro headlines, Chime members show robust spending, with discretionary spending outpacing essential spending among tenured members, and average balances increasing. Matt Newcomb further noted that ChimeCore migration is expected to boost gross margin to nearly 90% in Q4, and MyPay loss rates improved to below 1.2% in Q3, exceeding expectations.

James Fawcett sought specificity on which model elements weakened and then improved, how Upstart's systems compared to the broader market, and asked about the December quarter forecast, exit rates, and run rates for 2026.

Answer

CFO Sanjay Datta clarified that the model's separation accuracy and credit performance remained strong; the 'weakness' was in approval/conversion due to increased conservatism from macro risk signals, which could be a 'false negative' in hindsight. Sanjay Datta expressed optimism for Q4 and 2026, citing good growth rates, model improvements, and strong new product performance, viewing model conservatism as a strength.

James Fawcett asked for specificity on which elements of the model weakened and subsequently improved, causing differences from the broader market, and inquired about Q4 exit rates and run rates for 2026.

Answer

Sanjay Datta, CFO of Upstart, clarified that the model's separation accuracy and calibration (credit performance) remained strong; the 'weakness' was its ability to approve/convert as many people due to increased conservatism from elevated risk signals. He noted that new techniques reduced measurement error. Sanjay Datta expressed optimism for Q4 and 2026, citing good growth rates, model improvements, and breaking out new products.

James Fawcett inquired about Visa's strategy and expected role in agentic commerce transactions, including the anticipated ramp-up and key milestones in its development.

Answer

Ryan McInerney, Visa's Chief Executive Officer, explained that Visa is taking a leadership role in setting standards for agentic commerce, similar to its past contributions in e-commerce and mobile commerce. He highlighted Visa Intelligent Commerce and the recently announced Visa Trusted Agent Protocol as examples of open, easy-to-integrate solutions designed to ensure secure and authorized agent transactions.

James Fawcett asked about Visa's strategic role and expected development milestones in agentic commerce, seeking insight into the company's participation in this emerging transaction type.

Answer

CEO Ryan McInerney highlighted Visa's leadership in setting standards for agentic commerce, referencing Visa Intelligent Commerce and the recently announced open and easy-to-integrate Visa Trusted Agent Protocol, positioning Visa as a key enabler for this new wave of digital commerce.