The Little Fintech That Could: “Airbnb’s Holding Costs and Foreign Currency Risks”


Airbnb inadvertently shined a light on one of its curious practices around foreign exchange trading earlier this week.

The home rental platform pledges to ‘cultivate a transparent community marketplace‘, but it took a high profile Twitter exchange with TransferWise CEO Kristo Kaarmann on Monday to highlight the company’s less than transparent FX practices.

The Airbnb customer was surprised to be charged an unexplained, hidden markup fee on his booking—costing him an additional £34.55. Yes, customers can see that Airbnb is making a currency exchange to complete the transaction. But what isn’t transparent is just how much that exchange rate differs from the real exchange rate between currencies on any given day, or the rationale behind the difference.

Shortly after Kaarmann first tweeted this realization, the @AirbnbHelp handle said the three percent is a “conversion fee in order to cover for accounts for Airbnb’s holding costs and foreign currency risks.”

Kaarmann then asked whether it is possible to pay in a different currency. This was the AirbnbHelp’s response: “Hi! Unfortunately, it’s not possible to change the currency. The currency you pay in is controlled by your payment method/country. We hope you understand.”

While Airbnb places the blame on a user’s method of payment, the company did not explain why they do not instead enable products that accept multiple currencies, and skip the currency exchange process entirely.

For example, Stripe’s Connect product enables businesses to accept over 135 currencies. And multi-currency cards, from challenger banks Monzo, Starling, Revolut, and others, have in-built this feature. And while we expect our banking provider to generate some revenue from these transactions; we don’t expect the same for the convenience of booking a spare room.

If nothing else, Airbnb could uphold their commitment to fostering a ‘transparent community marketplace’ by being honest and upfront about the exchange fees in the initial booking. Not wait until the customer is ready to check out.

Cadence is a fintech reporter and writer at Fintech Unltd, where she covers the changing landscape of financial technologies. Previously, Cadence interned at Psychology Today, Business Insider and the Wisconsin State Journal. Cadence is interested in how science and technology intersect with power and culture and is curious about the world we are creating for tomorrow, consciously or not. She graduated from the University of Wisconsin–Madison in 2017 with degrees in Journalism and Chinese. Send tips and story ideas to Cadence at [email protected] You can also follow her on Twitter @cadencebambenek.