Amazon Makes Buy Now, Pay Later Deal with Affirm - 7investing
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Amazon Makes Buy Now, Pay Later Deal with Affirm

August 31, 2021

Buy now, pay later (BNPL) has become a popular choice for younger consumers who either don’t qualify for credit cards or who chose to not use that method of payment. More and more retailers have been partnering with BNPL companies in order to offer the service to shoppers.

Now, Amazon (NASDAQ: AMZN) has entered that space by partnering with Affirm (NASDAQ: AFRM), a growing player in this very competitive area. The deal, which will roll out in the U.S. over the next few months, will allow Amazon customers to split purchases of $50 or more into smaller, monthly installments.

It’s a move that should be popular among Amazon customers and it might even lure some new users to the platform. Affirm already works with Shopify and a number of top retail brands. BNPL has been growing in popularity which led to Square spending $29 billion to buy Afterpay, an Australian BNPL company, and even Apple releasing plans to partner with Goldman Sachs for its own BNPL offering.

BNPL does not use traditional credit checks. Instead, companies like Affirm, have their own proprietary methods for judging creditworthiness. They often start by approving consumers for relatively small purchases before increasing their limits. BNPL works a lot like old-fashioned layaway where the consumer makes payments over time. The big difference, however, is that BNPL users don’t have to wait until they pay the item off before taking it home.

Affirm pays Amazon the full value of the item, getting an undisclosed bounty for taking on the credit risk. In some cases, Affrim also charges interest to the customer, though BNPL companies generally charge much lower rates than what a consumer would generally pay if using credit to pay for a purchase over months.

Simon Erickson joined the August 30 edition of “7investing Now” to break down what the deal means for Amazon and whether Affirm should be worried about the online retailer eventually kicking it to the curb in favor of offering its own BNPL service.

A full transcript follows the video.

 

Dan Kline: But for those of you who are here in watching, we’re going to talk about Amazon‘s (NASDAQ: AMZN) just announced this news broke on Friday, I believe with Affirm (NASDAQ: AFRM) to offer buy now pay later. Affirm’s buy now pay later checkout option will be available to certain Amazon customers. They haven’t said who so I’m assuming not me in the US starting Friday with a broader rollout in the coming months. That’s the vaguest of details probably because they don’t know what the tech ask is going to be there. The partnership will let Amazon customers split purchases of $50 or more into smaller monthly installments. Friday’s partnership is the latest sign of the booming installment lending space.

We have seen this happen absolutely everywhere. As younger consumers move towards these alternative lines of credit. Part of that is the credit card act i want to say of 2020, but I might get the year wrong – did make it harder for kids in college to get credit cards unless their parents are involved. Remember, Simon when we went to college, when pretty much like in your like opening day package, there were like four credit card offers you had no income. That’s not a thing anymore. So this does fill a market need. But I want to get the big picture first. And of course, we would love your questions and comments. So feel free to keep those going. But what does this deal mean Simon for Amazon and Affirm?

Simon Erickson  2:33: Well, first of all, for Affirm shareholders that you’re up between 40 to 45% today for your stock holdings. So congratulations. But Dan, let me actually bring this back in engaging way to start the conversation, which is if you’re a retailer of any retail location out there, right, you’ve got a bookstore, you’ve got a toy store, you’ve got electronics store, whatever it is, what is the most important piece of hardware in your, excuse me, in your entire store in terms of your business?

Dan Kline  3:00: That’s probably your point of sale system.

Simon Erickson  3:02: Correct. It’s the cash register, where you’re actually doing the the final, ringing up everybody’s credit cards, taking payments, whatever it might be. That’s always the most important. And now that we’ve transitioned that so much of sales to the internet, the equivalent of the cash register is the all-important checkout page. For anybody who has an e-commerce shop or anyone who’s doing business on the internet, the most important part is when you’re actually collecting payments from people. And so now we have a new option rather than just paying in cash, rather than just paying with check. Rather than paying with a credit card. There’s this new trend called buy now pay later, which is taking the world by storm. It’s very different than what credit cards are offering today. And any retailers out there, including Amazon that have an e commerce shop are really eager to get this as an option to attract people into their online stores.

Dan Kline  3:54: Yeah, it’s a it’s sort of works like layaway did. Back when I ran the toy store here was our layaway. You came up to me with an expensive item, say like an RC car that you wanted to buy for your kid at Christmas. And I’d say okay, it’s $500 and you give me 50. And I put a sign on it like a post-it note, put it in a closet, and you came back and made payments. And the problem is often you didn’t. In this case buy now pay later is very automated. So you go to Amazon and maybe my son wants $100 sweatshirt, that shouldn’t be a thing, but it absolutely is. And he’s working. So he says okay, I’ll buy now pay later, and they’ll charge him $20 there. And then whether it’s weekly or monthly, it can vary. They will charge him going forward. So is that basically how Affirm works and, Simon, How does Affirm make money?

Simon Erickson  4:40: It is. So the younger generation is very untrusting of credit card companies Dan, and they’re very untrusting of banks. You know, last year alone, there was $120 billion in interest paid to credit card companies. A lot of that was an APR of 20% or higher. There was another $15 billion that was collected for unexpected fees. Late fees are stuff that wasn’t transparently disclosed. And so what Affirm basically does, it says, Yes, we are going to charge you interest if you want to take out a loan in installments and pay it back over time. But we’re also going to be completely transparent of what you’re paying back over time. There’s no late fees, because we’re deducting it directly from your bank account, you have to be pre-approved to actually get access to Affirm’s installment plans. It’s basically a much more transparent way that is full disclosure upfront for anybody who wants to pay over time, rather than entirely upfront.

And so this is becoming a checkout option. If you buy something on Shopify or other merchants. Now, Amazon, you’ll have a choice in the checkout page of Do you want to pay with credit card? Do you want to pay with PayPal? Or do you want to actually use Affirm. And Affirm is very selective on who it’s offering, like you mentioned Dan, that option, too. It’s not just going out there and say, Hey, everybody use Affirm. It’s saying, Hey, we think this is a credit-worthy buyer, and we’re gonna offer an installment program for them called buy now pay later.

Dan Kline  5:58: Now, they’re not using FICO scores. They are using a little bit of a prove-it model. So what do I mean by that? So they say, Okay, I see Simon’s purchase record. And I see that he did an $80. Buy Now pay later, and he paid it off. So they might then extend to you sort of let’s call it an increase in credit limit. Am I remembering correctly from our discussion on Upstart? That that’s how there’s so that’s not the company’s name. The I’m sorry, the one we talked about that was just purchased.

Simon Erickson  6:26: Afterpay.

Dan Kline  6:27: Afterpay, too many company names after pay. That’s how it works, right? This is sort of and I love this a trust building model, where if you borrow 10 bucks from me and pay me back, I’m much more likely to loan you $100 down the line.

Simon Erickson  6:40: This is the secret sauce of buy now, pay later. This is the most, one of the most important parts that we have to consider as investors in this trend, right? It’s not just okay, they’ve got a credit score of this, we think they’re going to pay back the loan will make the loan available for them. Affirm is using more than 80 alternative data points to evaluate any creditors creditworthiness. So if you are interested in using Affirm for buy now pay later, it’s checking a bunch of traditional things, Dan, like you mentioned. Did you pay back your previous credit cards on time? Did you pay your utilities on time. But also some more exotic things as well. It’s scraping through social media feeds to try to figure out what your job is right now and how long you’ve been there. Are you are you happily employed? Are you switching careers every two months, I mean, things like this, that traditional lenders are not looking at.

And Max Levchin, who, by the way, we can talk about him a little bit later in the program. He’s kind of the brains behind all of these alternative data points. And the algorithms that will ultimately judge Hey, is this person going to pay back the loans or not? Because a really big part of this is Affirm is taking on the risk of those future payments from the merchants, this is not a credit card company that’s taking those anymore. It’s Affirm that’s holding those loans on their balance sheet. So they’ve got to be right. And they’re going to have a much lower delinquent loan rate than the industry averages for other payment options out there. pretty ingenious how they’re doing it.

Dan Kline  8:01: But this is also sort of the Planet Fitness model, where Planet Fitness doesn’t even take your credit card, they actually take your bank account info. So it is you don’t end up ending your membership simply because it’s three years later, and your credit card has expired. So they are directly connected to a payment source in their case, it doesn’t have to be a bank account, it can be a credit card linked to your Amazon or your Shopify account, or, or whatever it would be. So I would assume that when you’re talking, whether it’s a six week or a six month loan, that your default rates go down a lot when it’s directly tied to a payment source.

Simon Erickson  8:36: There’s a there’s a two-sided network on this right. And so then I apologize and getting back to your question you asked me five minutes ago, how does Affirm actually make its money? Uh, yes, it is collecting interest payments that are tied to the length of the loan and the amount that the item you’re wanting to purchase or items that you’re purchasing total up to. So you’re charging an interest rate. And sometimes it’s as high as 20%, depending on on the type of loan or the duration, but a lot of times it’s single digits or even in the teens.

The other side of it is for the the use of its platform. It’s charging merchants typically between 3 and 6% of the total, the total payment that was made for each one of the transactions just for Affirm to take on the risk and make it available for retailers. And so in addition to all the algorithms that it’s figuring out who’s going to pay back their loans, it’s also using some really neat machine learning to personalize the vendors that it represents. So Dan, another example just to make this real say that you sign up for Affirm and it sees that you went out and you bought a life size Stormtrooper from Star Wars, right?

Dan Kline  9:38: It’s funny you mentioned that because I’ve sent my picture pic my wife pictures once of a life size Boba Fett and told her I bought it which I did not of course, because I like it.

Simon Erickson  9:46: I tried to come up with the most ridiculous ridiculous Disney themed example that I could for this one. But now Affirm says okay, maybe Dan likes doesn’t maybe Dan would like to travel to Disneyland sometime. So in your Affirm app and might say hey, Dan, you know, we can actually give you an installment plan for you to book a flight through Expedia to go to Disneyland. Are you interested in this. And of course, this is a big one for Expedia, because that’s another payment for a flight that it might not have had. Otherwise, it’s a big win for you. Because you can say, hey, Affirm kind of knows my interest. And it’s lifting the overall revenue and lift from a lot of those other vendors and retailers.

Dan Kline  10:19: And we are seeing this model not necessarily Affirm. But in the travel industry. I know that every time I go to book a cruise, it offers you the option of splitting up those payments over time using a third party. And actually, the fees are very light, if not non existent. Because I’m guessing, because that those companies are taking on the risk, the travel company, the cruise lines in these case, are giving them a kickback. Sort of like if you book through a travel agent, the travel agent makes money that doesn’t cost you more.

So this is one of those things where if I do Affirm through Amazon, is Affirm then going to send to me, hey, do you want to download our app, because if you have their app, they can make offers for you. If you don’t have their app, you might get offered increasingly large limits or deals on Amazon, but you won’t necessarily be able to like you know, go buy a Peloton using your Affirm account.

Simon Erickson  11:14: Correct, you have to be approved, you have to be approved by Affirm in order to use Affirm as a buy now pay later option. And just like we said, this is kind of a long term story of developing trust, especially with tech savvy, younger generation and keeping them satisfied so they’re going to use this more and more often. They say if you if you show me the fees upfront, and I know exactly what I’m getting into, and I’m not going to get hit with these ridiculous interest rates or these ridiculous late fees later on, I want to use Affirm for my future payments.

And right now, Dan, one metric that’s really interesting is the NPS score, the net promoter score for Affirm with the customers who have already signed up with it 78. That’s right up there with Apple and Tesla that’s extremely high when you consider other financial services, companies and banks, which are typically at the bottom of the list because the fees are getting charged. Affirm is really winning over a lot of consumers.

Dan Kline  12:03: Yeah, it’s also a guaranteed repayment from your point of view, as opposed to a credit card where you know, your refrigerator breaks, you buy it on a credit card, and then something else goes wrong, and you’re making minimum payments, and you’re endlessly in that interest loop. This is call it a short term pain. And even if you have to make some sacrifices, you might literally go like, are we gonna go to dinner at Applebee’s tonight. Nah, let’s not do that. Because that $40 can be our Affirm payment. Now it’s worth pointing out as far as I know, you don’t have to apply. They are, Affirm is basically popping up as a choice. If a firm through its dragnet, let’s call it decides you are creditworthy of this. So this is not like a credit card where you actually have to fill something out. Am I getting that right?

Simon Erickson  12:45: It is Dan and kind of what they’re referring to this is responsible lending. Right, Affirm’s bigger picture they’re trying to accomplish as people who shouldn’t be taking out credit, not taking out credit. So many credit card companies were just preying on people that couldn’t pay back, right, they rack up more and more interest payments that got higher and higher every month. If you couldn’t pay it back, you’d hit late fees, you get all these other fees like it was unfortunately the people that couldn’t pay it back that were fueling the revenues and the profits of these large companies.

Affirm is saying, Hey, we don’t want to be making loans to those people. We want to have this as a responsible lending option for people who are going to pay it back. And we’re going to be very selective about who we use, who we actually approved for those kinds of things in a completely alternative way to doing FICO scores. And so it sounds obvious. It’s actually very, very hard to do.

We talked about Max Levchin a little while ago, Max Levchin was the Chief Technology Officer of PayPal. And oh my gosh, what an amazing story with this guy. I mean, Ukrainian born computer programmer, both of his parents were educators, he was kind of writing computer algorithms at a young age gets displaced by the Chernobyl nuclear accident. Moves out to a farm where he has no access to a computer comes back memorizes everything that he wants to program, puts it back in and gets tapped as the CTO of PayPal, who becomes the leader globally in total payment volume for digital sites. And so Levchin, in his times at PayPal, he spent so much time developing the algorithms to detect the outliers.

Right, PayPal had problems with fraud from day one of bots that were trying to make payments, you know, to email addresses that he said, No, no, that’s not a real person. Let’s flag that one. Now, he’s brought all of that to Affirm and says, Hey, Affirm, I don’t think that that is a real person, or I don’t think that’s the person we should be listening to, or, hey, let’s really refine and then re refine and then we refine again, the algorithms that are kind of judging the creditworthiness. I mean, this is going to be what’s going to make Affirm successful in this space. Not all by now, pay later, providers are the same. I have my money on Affirm as being the one that succeeds in this space.

Dan Kline  14:44: I think there’ll be multiple winners in this space, but I would bet on on Affirm, that is not an official recommendation. That is just sort of a gut opinion. I want to throwback in a second to sort of disrupting credit cards but let me throw something else here that I think Affirm is going to disrupt I mentioned refrigerator breaks. Well having to buy a refrigerator because you need a refrigerator is very different than buying a speedboat because you have a credit card.

That is a ridiculous example or whatever and a new 65 inch television. Affirm will have the ability to disrupt the store credit card. What does that mean? Well, Home Depot has a much lower standard for giving you a credit card than say Visa does. Not in every case. But a lot of cases store credit cards have traditionally been the lowest rung of the starting your credit journey ladder. But that comes with very, very, very high fees, like you’re going to be paying in the 20s. If Affirm knows you has that history, they can absolutely, you know, decide in certain cases where they’re going to, you know, to loan money.

Paul, I am not even going to try to pronounce your last name, I apologize, I’m too far away to see it. Afterpay doesn’t charge interest to customers, just a percentage to retailers. And Affirm often doesn’t as well, I think Afterpay has been more vocal about not doing it. But it wouldn’t shock me if in some cases they do in the future. And Affirm is largely not done it but is more vocal about the fact that they’re that they do do it that it’s a tool in their arsenal. And obviously, this is going to depend on actuarial tables, and things like just like your credit card, if you are a higher risk person, you are probably going to pay a higher rate. It is very likely that they use some sort of terms like that. Simon I’m gonna let you jump in, and then we will happily get to the credit card questions here.

Simon Erickson  16:31: I mean, if you’re an investor in this space, the relationships and the partnerships or everything, right? There’s going to be questions of you know, who’s teamed up with Apple for installments, you know, who’s teaming up with? Now, Amazon’s working with the firm, a firm before is already working with Shopify, who took an 8% equity stake in the company last year, and gets a small kickback for each one of them that is placed on the Affirm platform. I mean, there are only so many really, really big game changers out there, those three are three of them in the world of e commerce.

We’re going to talk a little bit more about this in the second segment of this program. Dan, when we talk with you about the state of retail today. But Affirm’s got a really, really nice head start. I think that Levchin being on board got them access to a lot of capital. Equity right now is only about five, four or 5% of the total capital that they require for the loans that they’re giving out for the people that want to do, they pay in installments, right? Affirm is taking on the risk, they’ve got to pay the merchants for the goods that are actually bought

Dan Kline  17:28: This is a very capital intensive business. That’s part of why they have to roll out slowly on Amazon. Because if they roll this out, and people really love it, all of a sudden, they have a need for cash, cash comes with a cost. They have to make more than it’s costing them to borrow. But this is also a data driven business. So let’s say they’ve loaned to you Simon five times. And you’ve always paid it back, no problem, no misses, no bank account hiccups, none of that. Well, they might decide Geez, let’s loan to Simon seven times nine times. They’re going to be a lot of people like you and I that just want to use this even though we don’t need to use this.

There are definitely times where I’ve had an unexpected purchase, like Oh God, I need a new computer monitor it’s 400 bucks, or whatever it is, I don’t want to spend 400 bucks, and you go Oh, I can split it up in installments. American Express lets me do that. I can go in after the fact to a certain amount of payments a month on my pay it all at once American Express Platinum card and say hey, can you just split that up over six months and and there’s no interest charge for it. Amazon has been doing that for credit card customers. So this is not completely new ground for Amazon. The way by now pay later has worked on Amazon, if you have their card linked has worked a lot like Affirm here.

But I want to talk about credit cards and we see your questions and comments. We are going to take those at the end of the segment. So if you have other specific questions or comments about this space, please get them in and ask us or if you want to say nice things about the new timeslot feel free to do that as well. 7Investing Now Monday, Wednesday and Friday live at 1pm eastern time. But are we seeing a shift away from credit cards? Or is this just sort of another tool in the payment arsenal that also is appealing to less creditworthy younger people?

Simon Erickson  19:08: It’s not the credit card killer, Dan. I think that there is still definitely a place for this people want to get points, you know that they can use it Marriott because their credit card is is set up so that they can have loyalty rewards that are attached to them. But I do think that it’s a new option for people who are doing business primarily online rather than the point of sale machines where you’re swiping or inserting your credit card all the time.

That is very appealing, you know, and then back to the point of personalizing the deals. I think that’s a huge part of it, too is as Affirm learns more and more about who’s going to repay in installments and who you want to actually be loaning money to imagine those vendors like the example we just gave of Disney kind of influencing the Expedia trip. Would Expedia no through a firm that you’re the type of person that likes to make those type of purchases, and that you’re going to pay it back? And would you give 10% off of an offer for a flight to somebody like Dan that you want to do business with. I mean, I think that the there’s a lot of insights in the data in the transaction data that can be learned from this. And it’s going to kind of compound over time. So I think that’s that’s definitely playing to Affirm’s long term advantage.

Dan Kline  20:10: So Simon, you had a note in here that the credit card industry needs to be more transparent. And that’s absolutely true. Though, I do think that has happened. I have a number of credit cards that are very upfront about what it is. And I’ve talked a lot about this a lot. I use credit cards for everything. But I pay my bills on almost a micro basis, like I buy something, and then I might go in that night and pay the bill, because I’m trying to maximize rewards credits. I don’t think that’s how most people do it. But you said that millennials don’t trust banks. That part I’ll accept and don’t even want to carry credit cards. That part? I’m not sure I buy.

Simon Erickson  20:45: This Generation Z, not technically millennials actually.

Dan Kline  20:49: So do you think that’s largely because they have credit card debt? Is it because they have college loan debt? And maybe credit cards aren’t viable for them? And also, they they don’t have they’re not creditworthy? Because they already come into it with with another set of debt?

Simon Erickson  21:03: Both Yeah. I mean, your parents telling you, Hey, stay away from credit card debt. You know, you don’t want to be racking up credit card debt, I’ve probably abused some knowledge over the years as well. Like you said, are they are they the people that the credit card companies want anymore? Now, they’re already burdened with student loan debt, or aren’t making a ton of income right now, maybe the credit card companies, as they’ve cleaned up their own practices aren’t actually offering them to them in the first place.

Dan Kline  21:26: They’re not allowed to offer them. And that and that’s been really important. So I want to share a chart here from from our friends over at Statista, they are not our friends, they are a public service. I’m sure they’re very nice. But by now pay later has grown exponentially. Simon, if you want to dig into the numbers, I’m sure you can see this better than I can.

Simon Erickson  21:42: Yeah, surely what you were looking at over $100 billion, estimated in the next four years from the base of like $30 billion today. I mean, this kind of this is kind of a bigger trend that I think we should be keeping an eye on as investors. And when you see something like that with the exponential growth, like you mentioned, look at 2019 Dan to 2020. I mean, this is a concept a couple of years ago.

Dan Kline  22:00: This is really, really quick growth. This is also a crowded space. PayPal, Plarna, MasterCard, and fi serve. American Express offers this in a fashion because you still have to qualify for the credit card. Citi, same thing JPMorgan Chase, same thing. And then you’ve got square which which bought afterpay, which makes it a major player, Apple is planning to launch installment lending in a partnership with with Goldman Sachs. You mentioned Disney. Disney already does this with its annual passes if you live in Florida. You can 0% finance, so you don’t have to write a $700 check, which obviously not a lot of people would be willing to do.

Maxx Chatsko, our very own Maxx Chatsko tip for millennials. Student loans actually help your credit by increasing your length of credit earlier in life. And your payment history. Yeah, that’s important. I remember when I went to college, I got a co signed credit card with my parents to start building my credit history that doesn’t actually help that much because it’s more tied to my parents.

But yeah, having some basic loans. And look, you are seeing services now that look at things like did you pay your Netflix bill and actually report those Experian does that they will report that to the credit bureaus, which will help that’s what the Experian boost is, is you pay the money. So you can input different things to show sort of alternative creditworthiness, which is relevant in an age where buying a house is not all that acceptable. Simon, obviously there’s going to be losers here. But is this like credit cards where there’s room for five, six, even maybe more than that winners?

Simon Erickson  23:34: To be determined Dan. You know, if you have a checkout page, you don’t want to have five or six different options for buy now pay later on, then you want to have one, you want to have either Affirm, or you want to have Afterpay or you know, whatever whatever it might be, you don’t need to have multiple options. I think that the other part that we haven’t really talked about yet is the international opportunity. We’ve talked a lot about this in terms of you know how we’re buying things online here in the United States, there’s a huge opportunity for developing markets where people don’t have credit scores, or there’s not a whole lot of transaction history because they’ve been paying in cash.

And so what is an opportunity to find those people who are creditworthy, but just don’t fit into the checkboxes of the current system? And how can you actually loan them money so that they can go on and expand their own retail operations too? I think that in my mind, there’s a handful of winners, I’m not sure it’s as high as five or six, I kind of think there’s like three or four personally.

Dan Kline  24:24: Yeah, I think there’s gonna be a lot of sub winners, though, like, this is a interesting way for American Express to sort of not be a traditional credit card. American Express does have traditional pay later credit cards, but their core business has always been this you sort of have no limit, but you pay at the end of the month. Their ability to see my credit history of Wow, Dan’s always paid his bills, maybe who uses Amex more, if we extend him these terms. I think there will be some winners like that and some other things like whoever works with Apple will be a winner, just because they’re working with Apple and Apple products are expensive. So that’s Goldman Sachs. They may have one client, but they’re gonna be a winner in this space. I want to take –

Simon Erickson  25:03: That’s a huge one Dan in reputation is everything right Goldman Sachs. What was it describes the vampire squid that was sucking people’s faces off. Terrible, terrible analogy for the company. Now they want to be the teddy bear that builds trust with consumers. And so they’ve got Marcus is going for consumer financing. It’s a crowded space to be interesting to see who pulls it away as the leaders in this one

Dan Kline  25:13: And Apple doesn’t partner lightly. So that is quite a vote of confidence. I want to bring up [NAME NOT LEGIBLE] comment because I don’t think we fully addressed it. And he has any impact on Shopify, Square with the Amazon Affirm deal. I don’t think this changes anything between Shopify and Amazon. It may be, you know, takes a tiny bit of momentum from the sort of Shopify marketplace and people who because they offer that maybe would look for products there. But I think both of these companies have just, they’re not really competing, even though they’re incredibly competitive, if that makes any sense, Simon feel free.

Simon Erickson  26:01: Yeah, and two different different sides of air rights and Shopify. And then we said Square is actually competitor to Affirm now we because of its partners, because of its acquisition of Afterpay. Whereas Shopify is a partner with Affirm because they are offering a firm as an option on their platform with the vendors itself on Shopify, and they have an equity stake in the company too. So it’ll be it’d be interesting to see, like we said, as this progresses.

Dan Kline  26:23: So let me throw out the question we always ask about Amazon. Amazon is pretty famous for sucking your data dry and then leaving you by the side of the road. Is that going to happen here? Could Amazon just use this to see if this is something that customers want, and then launch its own buy now pay later or bring in other partners there? I don’t think exclusivity has been explicitly guaranteed in any of the public parts of this deal. We’ve seen.

Simon Erickson  26:49: Oh my gosh, you’ve got to think Dan, and in some of the closed door meetings, there was kind of ease looks right of like scratching your head saying, Ah, what is Amazon gonna use with all of our data? Are they gonna they’re gonna have their own buy now pay later solution later on. There was no reveal of the financial terms, if any, in this partnership with Amazon and Affirm it seems. Like from what I can see so far is just Amazon, allowing Affirm to be an option for it, rather than Amazon taking an equity stake rather than Amazon, you know, having some kind of financial interest in this. That kind of makes you wonder what Amazon’s long term game is for this Dan. I wouldn’t personally be surprised to see them try something like that in the future.

Dan Kline  27:29: Yeah, if I’m Affirm, I’d be trying to make a deal for Amazon to take an equity stake, I would think that would be your best protection. Now, what we don’t know and it’s very clear is there’s lots of things in deals, you know, there might be trigger points in this where Amazon has the right to buy 5% at a certain price or, you know, probably a pre exploding valuation price, because obviously, this is has gone up quite a bit. This is going to be a topic we talk about a lot. This is a developing method of payment. It’s one that’s going to come up we talked about the financial space. So this is not the last you’ve heard of this.