Affirm is another start-up taking aim at traditional banking. The company uses data science in credit-scoring algorithms combined with more traditional measures such as credit history and income to determine credit worthiness, unlocking access to credit to a whole new set of consumers. It offers shoppers loan terms of 12 months and interest rates of zero to 30 percent APR. Most of its users are millennials, but Gen X and Boomers are also catching on.
"They can do in seconds what banks took weeks to do. That's pretty stunning," said Khosla.
In his on-stage keynote, CEO Levchin will unveil three new products and a new partnership. He will also discuss Buy with Affirm, the company's substitute for credit cards. Levchin will be joined on stage by Tradesy CEO Tracy DiNunzio to provide the merchant perspective.
Stripe CEO Patrick Collison will sit down for a keynote with Khosla on Sunday. The 5-year-old start-up, now valued at more than $5 billion, processes billions of dollars a year for thousands of businesses in 21 countries.
Stripe is taking a different approach, working with banks rather than against them — this year it announced partnerships with Visa and American Express. The company is also a key player in the war for social commerce, but does not care who wins: It powers Buy Buttons on Facebook, Pinterest and Twitter. This year has been a busy one; it also announced Relay, an application program interface that lets merchants sell across multiple platforms with a single tech integration.
But can it compete with public rival PayPal? "I do believe Stripe has significant competitive advantages over PayPal," said Khosla.
"First, it's a much better experience for the user, and user experience on mobile or the Web always wins. But really the larger point I would make to you is this is such a large space, PayPal doesn't have to lose for Stripe to win. They can both win."