Scaling Airbnb to 191 countries and millions of hosts

Speakers

Notes

We are less concerned about the demand rather than the supply
We have to optimize for the Host experience
- the importance of the supply side is tantamount at Airbnb
- they have a chief economist at Airbnb
- the seller side
- payout in 65 currencies
They could have set up a system where the guest payment is tied to the host payout, but they decided not to.
- They do hedging for fx trading in order to achieve this; they manage all of this
- They have a treasury guru who is an expert on this
- They have a guy who watches the price of oil and how that affects our settlement currencies and our currency position.

At what time do you decide to enter a new market?

They follow an expand and then optimize pattern.
They potentially acquire local acquiring partners.
You cannot copypasta the US model.
How long does it take treasury to open that local bank account? Sometimes it will take 12 months to open an account.
Sometimes it's not clear from a card scheme to an acquirers perspective. You have to validate your information across all parnters.
If you think you're processing legally because your acquirer said it's ok, you need to ask again.
They had to rearchitect their platform to support decimales.
Gateway, acquirer, card scheme are the major stakeholders.
Airbnb supports cash in Cuba.
Airbnb teams: Treasury, Legal, Tax, Product, Financial Infrastructure

Complex payments stack

Airbnb has a lot of countries
Temporal issue: the time of the charge and the time of the payment, now the treasury guru needs to look at the price of oil.
What's harder, paying out to guests or paying out to hosts.
Payouts are a much harder problem, you don't have the same notification/response feedback loop as you have with pay in.
- Example, they need the host to call them to tell them they haven't recieved their funds.
- Payin is API based, pay out is batched files (you need to buy a lot of Boba tea lol)
Payouts are hard. Global is hard.

Operations

Airbnb optimizes for operational maintenance. Need to know predictability of cost.
Does the partner's portal meet the needs of Airbnb's ops team?
10% of our hosts in the US are teachers
largest segments of hosts in the US are women over the age of 50

Reporting

The quality of reporting in this industry is varied.
- Interchange, scheme fees.
- Money movement on refunds and chargebacks.
- Sometimes it's just one invoice, good luck trying to reconcile that.
- If you want to move towards public trading company, you have to be able to predict your revenue and optimize for reporting.

Closing Thoughts

Two sided marketplaces are tough. Incentivize employees to use your product.
Build a team of practical thinkers and planners who are really going to manage the project.
You have to be disciplined. Someone needs to be buttoned up and tight on the details.
Do your extra due diligence up front.
Don't spend too much money on marketing.
The Network effect is what gets you to the Airbnb level. You need people to come back and talk about the product and build community.

Future of Payments

We've been exchanging value since the beginning of time.
Real time is now happening.
Your ability to communicate with the global is going to be facilitated by payments.
Obstacle to bringing the world closer together is payments.
It's tied to digital identity.
We need to mitigate threat of someone's ability to steal payments online.
Place of innovation: Asia
Demonitization in India, market penetration in China/India
Several emerging markets are skipping steps in terms of what they would adopt payment wise.

Additional Reading

List of Articles, Panels, Talks, and Interviews from Payments Team @ Airbnb