Many Swiss residents travel to neighbouring eurozone countries for their holidays. These countries are close and Swiss francs go far there. However, to get the most out of a strong currency you need a good exchange rate.
If a Swiss resident presenting euro cash at a checkout in Germany or France was told they couldn’t pay in euros because they live in Switzerland – “I’m sorry sir but you live in Switzerland, you must pay in Swiss francs at our inflated exchange rate” – few would return. But this is what Airbnb does.
Numerous payment solutions offering good rates have sprung up to rescue cross-border payers from greedy card issuers, many of which add a 3% charge into their exchange rates and additional charges on top.
Card issuers, not Visa and Mastercard, decide how much to charge cardholders. Issuers can, and some do, charge 0%. With an old statement, you can check how much your card issuer charges here: Mastercard or Visa.
It’s easy in Switzerland to become hardened to this sort of thing. Often withdrawing euros from a Swiss euro account costs 1% of the sum extracted.
Unfortunately companies like Airbnb have decided to play the same game, betting most won’t spot the charges or will just cough up anyway.
So how does Airbnb extract extra money from your hard-earned holiday savings?
When Swiss-based users move to the payment stage the price is converted from the host’s currency into Swiss francs using an exchange rate that includes a 3% margin. For example, a place listed for €850 will cost you CHF 1,0171, CHF 24 more than it would if you paid in euros using a card with no foreign transaction fees.
A Swiss resident spending CHF 10,000 this way in the euro zone gets an extra CHF 300 taken out of their pocket.
Swiss Airbnb users get particularly hard hit by such fees. Living in a small country at the centre of Europe with its own currency makes for a lot of cross-currency travel.
Swiss residents aren’t the only ones getting hit. Anyone using Airbnb’s service to book outside their home currency is.
Plenty of users have complained on Airbnb’s own website. One reported receiving the following response: “I know this is frustrating, and this is a popular complaint, but at the moment the system works this way…”. The thing is “the system” did not always work “this way”. Numerous users report being able to chose their transaction currency in the past.
Airbnb’s help page “Can I pay with any currency?” says “No…”. Le News contacted Airbnb about the possibility of avoiding these extra fees, but the company never responded.
For a while it was possible to avoid the charge by changing the currency at the bottom of the page. Now this doesn’t work. Instead it adds a layer of currency confusion.
For example, after switching currencies, the price of a place advertised at €464 jumps to €478 upon clicking the “Request to Book” button, with a note at the bottom saying the final charge will be CHF 555. So if you miss the unexpected jump in the euro price, you might glance at the €478 and CHF 555 and think you’re getting a decent exchange rate.
Airbnb standards require users to be fair and authentic, but this doesn’t feel very fair or very authentic.
Airbnb’s lawyers have been busy too just in case the company breaks commitments, another standard Airbnb enforces on users. The terms and conditions limit legal remedies. For example US class actions are excluded.
Companies like Airbnb benefit from the network effect. The more users they have the more favoured they become. This gives them a natural advantage and power to exploit.
1 Using exchange rates quoted by Airbnb (1.196) €850 is CHF 1,017. Using a zero fee Mastercard (1.1684) it is CHF 993. Exchange rates are at 4 December 2017.