The rise of Airbnb has revolutionized the hospitality industry, turning ordinary property owners into income-generating entrepreneurs. By the third quarter of 2021, Airbnb hosts raked in a whopping $12.8 billion. But how do these hosts receive their earnings? Let’s break it down.
NOTE: Airbnb payment and payout options may vary across regions and currencies. This article primarily covers Airbnb Payment Options in the US system, which mirrors the majority of other countries.
Optimizing Your Earnings: Understanding Airbnb Guest Payments
Understanding how guests pay is critical for hosts to optimize their earnings on Airbnb. The payment methods open to guests largely mirror those available to hosts, although some money transfer services might not be available in certain regions. Hence, hosts should anticipate debit or credit card payments predominantly.
Guests must establish a default payment method prior to making a reservation. For short-term stays under 27 days, guests are charged the full amount upon the host’s acceptance of the reservation or activation of the Instant Booking option. Longer-term guests, staying for 28 days or more, have an upfront charge followed by subsequent payments throughout their stay.
Airbnb explicitly prohibits cash payments or bypassing their platform for transactions. Violators risk getting their properties banned.
Security deposits add an extra layer to the payment process. Airbnb holds the stipulated amount from a guest’s payment account two days before check-in, releasing it 14 days post-checkout unless the host claims it due to proven damages.
Ensuring Smooth Transactions: How Airbnb Hosts Get Paid
To begin accepting bookings, hosts must set up and verify their payment and payout methods via their Airbnb account. Once completed, hosts select their preferred payout method.
Earnings from a guest’s stay transfer to the host 24 hours post-check-in, with Airbnb guest fees added and service fees deducted. Multiple same-day payments amalgamate into a single payout. If a minimum payout amount exists, the funds deposit only once this threshold is met.
While Airbnb releases payouts after 24 hours, processing time varies depending on the payment method, typically up to three business days.
Hosts can monitor all payout statuses through their transaction history in their Airbnb account.
Unraveling Airbnb Payment & Payout Options
As of 2022, Airbnb hosts and guests can select from five payout options:
- Direct Deposit (Bank Transfer/ACH): Airbnb directly transfers earnings into the host’s bank account. Hosts need their routing and account numbers (usually found in a checkbook). There are no Airbnb processing fees, but banks may levy charges.
- International Wire: This is similar to a direct deposit but involves banks from different countries. The host’s location determines whether an account number or IBAN (International Bank Account Number) is needed. Although no Airbnb processing fees exist, conversion rates apply due to foreign currency payouts.
- Western Union: A globally recognized money transfer service, Western Union requires the host’s full legal name to match their Western Union ID. A processing fee of $10 USD applies with a mandatory minimum payout of $60 USD.
- PayPal: A popular international money transfer platform, PayPal requires the host’s username, which matches their registered email. Hosts should ensure their PayPal account is activated and verified well in advance. PayPal may apply its own transaction fees.
- Payoneer Prepaid Debit MasterCard: This service, complete with its own debit card, requires the host’s full legal name. Hosts can link existing Payoneer MasterCards to Airbnb or apply for a new one (can take up to 17 business days). Payoneer has its own transaction fees.
Useful link: Payment methods accepted – Airbnb Help Center
Setting Up Your Payout Methods on Airbnb: A Step-by-Step Guide
Here’s how to get your payout methods in order:
- Log into your Airbnb account. Click ‘Account’ (or ‘Profile’ on mobile apps), then ‘Payments & payouts’, followed by ‘Payouts’.
- Click ‘Add payout method’. Enter your country to see the available options.
- Select the desired method and click ‘Continue’.
- Fill in the required billing information, then click ‘Next’. Your new payout method will be submitted for verification. Airbnb will confirm the status via email. In the ‘Payments & payouts’ section, the method’s status will change to ‘Ready’ once verified.
The verification process usually takes up to two business days for money transfer services and international wire, and up to seven business days for direct deposit.
To further validate your new payment account, Airbnb may deposit a nominal amount (up to $1) before initiating a full payout.
Changing Your Default Payout Method
If you need to switch your default payout method:
- Log into your Airbnb account. Click ‘Account’ (or ‘Profile’ on mobile apps), then ‘Payments & payouts’, followed by ‘Payouts’.
- Click ‘Edit’ next to the payout method you wish to make default, then select ‘Make default’ (or ‘Set as default’ for mobile apps).
Troubleshooting Airbnb Payment Issues
Despite Airbnb’s robust and secure financial system, issues can arise.
If you struggle to add a payout method or your payout method isn’t functioning, possible causes include:
- You may need to provide taxpayer information before setting up any payment options (particularly for US-based properties).
- Your payment method could be pending if recently added or updated. Airbnb will notify you via email when it’s ready.
- The payment method’s information might be incorrect or outdated. Double-check and edit if necessary.
In case of missing payouts, don’t hesitate to reach out to Airbnb support and your bank or money transfer service. Although fraud is exceedingly rare on Airbnb, always promptly address any financial issues to ensure a seamless hosting experience.
Understanding the ins and outs of Airbnb’s payment system is key to a smooth and successful hosting journey. Navigate your payout preferences effectively, and enjoy the benefits of being part of the global Airbnb community.
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