Airbnb Simplifies Splitting Travel Payments

by Raymond Pucci 0

No more chasing down friends for their share of the ski lodge or beach cottage rental payment. This chore can now be eliminated when making accommodation reservations through Airbnb. The following article reports how Airbnb’s 2017 acquisition of P2P startup—Tilt—enables the solution.

Last Christmas, Airbnb’s CEO Brian Chesky asked a simple question on Twitter: If Airbnb could launch anything in 2017, what would it be? One of the top resounding answers was splitting payments among friends, and it’s easy to see why. People who have traveled as a group know the hassle of putting a large reservation on the group organizer’s card. Then comes the task of chasing friends to pay their share in a timely manner. It’s a headache, and one that Airbnb finally solved with the introduction of split payments. Starting Tuesday, the ability to split the payment between friends will become available globally.

While Chesky’s question predicted it would be a success, the company spent the last year building out how splitting a rental with friends would work. In February 2017, Airbnb acquired peer-to-peer payments startup  Tilt, which was like an early precursor to Venmo or Square Cash. A few months later, Airbnb started quietly testing how it could use Tilt’s technology to help people traveling as a group. The early results were promising and more than 80,000 groups used it to make it easier to pay, the company said in a blog post.

Here’s how it works: Whoever is booking the Airbnb will have the option for 72 hours to split the payment among friends. The reservation will show as booked on a host’s calendar, but the group has three days to make sure friends pay their fair share.

If the group hasn’t paid in full at the end of the deadline, the person who did the original booking will be encouraged to pay the remainder in full and be given a final 24 hours to make the payment. Otherwise, the reservation will be canceled.

By default, it will be set so friends split the reservation equally, but it can be adjusted by certain increments so a couple, for example, could pay double the price from one account as needed. Currently, the maximum number of people who can split the reservation is 16.

There still is a need to obtain payment card info from a group, but it’s a lot easier than pestering certain friends for a check that always seems to be in the mail. Payment sharing is taken off in the dining sector with pay-at-the-table applications. Now the travel market offers another large opportunity. We will be seeing more P2P solutions that are built into the purchase platform rather than as a separate transaction. Convenience and immediacy are the key attributes.

Overview by Raymond Pucci, Associate Director, Research Data Advisory Service at Mercator Advisory Group

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