Avoiding the Foreign Transaction Fee

Terrence0
Level 10
Mount Prospect, IL

Avoiding the Foreign Transaction Fee

I have a suggestion for Airbnb.  Currently, they have a very inefficient policy that they pass off onto the traveler.

 

I have a credit card that doesn't charge foreign transaction fees (like many other avid travelers) - my bank covers these fees for me.  Airbnb charges foreign transaction fees to book based on location - in fact, if you are booking and you switch the currency to the local currency of the listing, you will see a 3% lower cost (the foreign transaction fee cost) than if you look at it in another currency.  For my last 2 trips I have attempted to pay in the local currency (for example, if I am travelling to France, I will try to pay in Euros), but Airbnb will not let me do this.  Instead, they force me to pay in US dollars because I live in the US (even though I want to and have tried to pay in Euros), then they take my US dollars, convert them to Euros themselves, charge me a 3% fee (which my bank would have done for me for free!), and then pay the host in Euros.  This is dumb and inefficient - even worse, they pass this inefficiency off on me.  Give customers the option to pay in the currency of their choosing.

225 Replies 225
Charlotte1068
Level 1
England, United Kingdom

I've found this as well. I paid for a UK trip, with my UK bank account, and was charged in Euros then charged a foreign currency conversion fee? Seems a very weird way to get extra money! 

Morgan7
Level 2
El Cerrito, CA

One more thing, which more than likely will happen. They could set up a credit card offering, like so many other companies. Offering points that could be used for purchases or bookings.

Interesting idea Morgan - they should hire us as consultants!

Andrea9
Level 10
Amsterdam, Netherlands

From what I've been seeing it's more a currency difference because a host price is for ex. in $US, but for a guest in another country for ex. in Europe it would be visible and payable in euros, and since Airbnb always rounds up or down to a single unit without pennies or cents.

Well. It rounds up or down on pricing for guests, but since 2017 I get my payments exact to the second digit after comma - thus rounding only if beneficial to ABB...

Hey Andrea, this isn't a pennies and cents thing, it's on the order of 3%.  Here's an example.  We might find a listing in Paris for $110 dollar a night (which by today's exchange rate is 100 Euros).  However, if we switch the bottom of the page to display the listing's cost in Euros, it would show up at 97 Euros.  On a 3 week vacation abroad, that is not a trivial amount of money.  According to Airbnb's literature and terms of condition, this is because if you pay in USD, while the host desired payment in Euros, Airbnb will take your USD and convert them to Euros for you (for a 3% fee), then they will pay the host in his desired currency.  What frustrates me is that I do not need Airbnb to convert any money.  I can convert my own money, and I can do it for free.   

You used to be able to pay in the listing's desired currency, now you no longer can.  This is now just another hidden fee, they should just call it like it is, not try to make it sound like they are doing you some nice service.  And let's be honest, do you really think a $20+ billion dollar company such as Airbnb cannot get a better exchange rate than 3%?  Considering I can get a free one, I find that extremely hard to belive.

Hi Terrence,

 

Had I not come across your post I would still be trying to rip my head wondering why I was charged more than I was supposed to pay at checkout! Their customer service staff couldn't even give a straightforward answer but instead, kept throwing numbers at me.

 

Their excuse was the host wanted her payment in USD. My justification was 'if the host wanted her payments in USD then why don't you just let me know the amount in USD at checkout so I can pay in USD'. Moreover, if I had to pay for their nonsensical 3% conversion fee why didn't they just include that at checkout (I was shown a different amount; 3% LESS!!). Anyhow, didn't we have to pay an 'Airbnb Service Fee' on top?????

Most websites would show you the final 'actual' amount you need to pay and that would be the exact figured charged. How can Airbnb get it soooooooo wrong!?!?!

 

Felt really scammed.

 

 

@Grace157 .  Not only did you pay the hidden 3% Convesion Fee the exchange rate that airbnb charged you is normally much worse than if you let your credit card do it for you. Some lawyer needs to get after these hidden fees.

Terrence, have you tried this for a number of bookings around the globe? Because it's possible that your host in Europe has his currency setting in USD (or another currency) and you just assume it's in euros. Like I'm a host in the Philippines and if you switch to my local currency to book, my listing would still reflect a foreign currency conversion since I list my place in USD and not Philippine pesos.

Actually YES. It is all over the world. I am in Chile, I book a place for 64000CLP and when I log in into my account, even if I want to pay in CLP the price automatically changes to 67000CLP

Kasia6
Level 3
Loughborough, United Kingdom

You're spot on, it's just that most people don't pay enough attention with their money. One of the many delightful airbnb 'features'.

Geoff30
Level 7
Kendal, United Kingdom

You are right - but hey, it is FAR MORE than 3%. And AirBnB are not going to change their minds about this! They USED to let customers pay in any currency, and since 2015 they have deliberately prevented customers from doing so.

 

Why? Because they seem to be making HUGE PROFITS from the process, and overcharging customers for forced currency conversions to an astonishing degree!

 

There are TWO ways that AirBnB charges for the currency conversion that AirBnB FORCE customers to use.

 

1. A 3% conversion fee - this is explicit and they make it clear.

2. Their currency conversion rates. This is not so obvious, much more hidden and a FAR bigger charge. Have a look at their help page on this. It says:

 

"Exchange rates and currency conversion

When the currency you’re paying with is different from the default currency of the country where the listing or experience are located, we convert your payment automatically.

The base exchange rate uses data from one or more third parties, such as OANDA. It’s updated regularly, but may not be identical to the real-time market rate. If you’re paying in a currency different from the default currency of the country where the listing or experience are located, we also charge a 3% conversion fee on your total cost; the conversion fee accounts for Airbnb’s holding costs and foreign currency risks.

The exchange rate used will display on the checkout page before you confirm your booking."

 

Now look at the OANDA site they refer to, and see what sort of exchange rate you get from it, compared to the ACTUAL interbank rate that Google will tell you about, and that your credit card provider would use, if you choose the right card:

 

https://www.oanda.com/currency/converter/

 

When I looked at what I WOULD have paid, had AirBnB allowed me to pay in the local currency of the booking (EUROS), using my credit card's exchange rate, it would have been GBP1,022.25. AirBnB charged me a total, iuncluding their 3%, of GPB1102. That's a difference of almost GBP80 - or about EIGHT percent on top of my booking.

 

It works out to be more than half as much again as the whole "AirBnB Service Fee" they say they took for my booking.

 

I'm going to say that again. AirBnB seem to be making almost 60% EXTRA MONEY for transnational bookings like mine out of their Currency Exchange charges, on top of of their full standard "Service Fee" for providing their service.

 

It also seems according to this website, that what they are doing is actualy in contravention of the rules of the Credit Card Services that we are usig to pay them, such as MASTERCARD and VISA:

 

https://danielpocock.com/disabling-dcc-on-airbnb

 

My credit card company said that AirBnB had not told me the truth about the way that they had charged my booking and prevented me from paying in Euros, and offered to dispute the transation for me. However, AirBnB then appeared to threaten me with the possibility of being BANNED FOR LIFE from AirBnB by saying:

 

"Please also note that disputing an Airbnb payment is a violation of Airbnb's Terms of Service in which may cause your account and any future accounts disabled.

We appreciate the time you’ve taken to share your concerns with our team. However, we have issued our final decision for this case and we will disengage from further discussion on this topic."

 

In view of this, I have some trepidation as to what will happen to me for posting this post. I hope that nothing bad will happen, but if you don't hear from me again, you can draw your own conclusions  . . .

Thank you for posting all of this detail--it is very helpful, and we are also frustrated with the extra exchange fee as well as the horrible rate. It's a shame really that such a viable business would choose to use such questionable practices. 

Totally agree its definately more than 3% conversion fee that they claim.

Jamie779
Level 2
Osmington, United Kingdom

Surely this is a legal issue? I checked my invoice that was in Euros but the payment page clearly stated GBP. The only reason I noticed was when my bank charged me a foreign transaction charge. I'm pretty sure its not legal to do that?