7 Days to be paid???

[Chad435]

Hello, with price increases for utilities. Does anyone else have struggle getting paid out by airbnb taking longer then 24 hours? 

Utilities company's are now charging late fees and turning off the utilities while guests are staying in the property. 

How do we fix this? It should not take longer then 24 hours.

[Mike-And-Jane0]

@Chad435 Airbnb is offering fast pay service (24 hr) in the USA. It is very expensive though at 1.5% (which equates to an APR over 70% if the rental value is small)

[Sudsrung0]

@Mike-And-Jane0 

That works out expensive over the year,

Are people that desperate to get paid in 24 hours, 

I have to say in our experience airbnb is the best at getting paid, 

Try some of the others it's anybodies guess when it arrives,

[Debra300]

@Mike-And-Jane0,

This fast pay service is just big business biting into a market that has been going on in the lower income marketplace for years.  Companies that offer payday loans or check cashing services charge much higher fees. 

I wouldn't recommend that someone frequently utilize fast pay, but the 1.5% may be less than what a person may have to pay in penalties for late payments or to reconnect utilities or renew coverage or return of a repossessed item.

[Mike-And-Jane0]

@Debra300 Fair points indeed. I had assumed that fast pay would have to become the default on the account so would be used for every payment big or small. Interestingly @Gordon0 I believe uses Paypal and the money arrives next day.

[Debra300]

@Mike-And-Jane0,

Your comment about Fast Pay being the long-term payout method made me look up more info about it.  I guess the US government was actually on the consumer's side with this service and prevents Airbnb to practice usury because the 1.5% is capped at $15 USD maximum.  With this in mind, I can see a scenario where hosts have setup multiple payout methods and choose which channel or split them for upcoming payouts.

[Mike-And-Jane0]

@Debra300 I thought the usury laws targeted unfairly high interest rates. At 1.5% per week where the limit isn't hit (ie below $1000) I would have thought the effective annual  interest rate is in excess of that allowed in many states.

[Debra300]

@Mike-And-Jane0,

Maybe I am giving hosts more credit in their ability to monitor and manage their payout methods so that they incur fees only when absolutely necessary and not select Fast Pay as their standard payout method.

I am probably wrong and not good with financial mathematics, but I think that your calculation of the Fast Pay 1.5% fee equaling to a 70% APR may be not be applicable because it's a one time fee and doesn't accrue or compound interest periodically.  I believe that your statement would be more accurate if hosts were borrowing against their future payouts and were charged 1.5% weekly until the loan was repaid.

But I will add that this service will be ultimately more costly for hosts who frequently receive payouts in amounts smaller than $1000 USD, and they should monitor and manager their future payouts and change their payout method based upon urgency or time sensitivity to receive the funds.   

[Mike-And-Jane0]

@Debra300 My thinking , and how I got to 70% APR is that if a host was paid $1000 a week and had 52 stays per year and that host chose the fast payment plan then each week they would be charged $15 each week, thus each year they would be charged $780 which, to borrow $1000 is a 78% interest rate.

I agree it probably doesn't compound though by your logic.  

[Debra300]

@Mike-And-Jane0,

Okay, I see how your mind is working.  Since the $780 is cumulative for the year shouldn't it be calculated against $52,000 and not $1,000?

[Mike-And-Jane0]

@Debra300 Good question! As I see it the host has 'borrowed' or been paid $1000 early so the cost should apply to that amount.

Are there no accountants or mathematicians on this forum to help us?????

[Gordon0]

Yup, like clockwork, @Mike-And-Jane0. Holidays included. 

[Debra300]

@Gordon0 and @Mike-And-Jane0,

PayPal works well for accounts registered in most G20 countries, but can take a very long time for those who live in developing states.  For example, my fellow St. Lucia hosts report that it takes a month or longer to receive a PayPal payment from Airbnb.  I am sure that it's due to international banking policies for the island, but the hosts due have to endure the uncertainty of when payment will hit their accounts.

[Gordon0]

Chad is from the States. 

[Debra300]

@Gordon0,

I think that @Mike-And-Jane0 and I digressed down the rabbit whole of trying to determine the real cost of Fast Pay after the service was mentioned to Chad.  If he's not yet been sent a payment notification he may have the opportunity to select Fast Pay if he meets the criteria.