How Airbnb Made Its Payments System More Accessible To Brazilians For The Rio Olympics

In 2014, when Brazil hosted the World Cup, the number of Airbnb listings in Rio alone rocketed from about 800 to 17,000. But most Brazilians couldn’t use their preferred payment methods to book a room on the homesharing site.

National credit cards, which can only be processed in Brazilian Reais (BRL), are more common in Brazil than international credit cards—but during the World Cup, Airbnb only accepted the latter. Local payment processing company Allpago (which partners with international companies including PayPal, Symantec, and Intel Security in Latin America) says that in 2015 only about 21% of the online transactions it handled in the country involved international credit cards. Just 6% of Airbnb bookings in Brazil during the World Cup came from Brazilians, according to Airbnb’s country manager, Leo Tristao.

During the 2016 Olympic games in Rio, even as the country faces an economic crisis, Airbnb is hoping to tell a different story.

With more than 25,000 listings, Rio is now Airbnb’s fourth-largest city (only Paris, New York, and London have more rooms for rent). And while just about everything that could go wrong in Brazil ahead of the Olympics has gone wrong, Airbnb, Tristao says, has been booming regardless.

“They have a space, they have a house,” says Tristao of Brazilians impacted by Brazil’s soaring unemployment rate and shrinking economy. “They are joining Airbnb and that is becoming a source of income.” At the same time, Airbnb often offers accomodations at a lower cost than hotels. “The recession environment, in a way [is associated with] our growth in Brazil. We can see that in the numbers. “

Tristao says that about 45% of Airbnb bookings in Rio for the weeks of the Olympic games have been made by Brazilians (general e-commerce in Brazil has grown over the same period).

About a year ago, Airbnb updated its payment structure in the country to support this type of local business. The company made local partnerships with processing companies of the same type as Allpago (which does not work with Airbnb).

It also updated its site to support two local forms of payments that aren’t typical in Airbnb’s native San Francisco. The first, called Boleto, allows people who don’t have credit cards to participate in e-commerce. Instead of entering their credit card number at checkout, they print a ticket with a barcode, which they can take to a local store to pay. (Allpago processed 24% of its partners’ online payments this way last year.)

To work with Airbnb, Boleto had to build enough time into the booking process for the guest to go pay the bill—but not so much time that the host was stuck holding a room for a guest who was not going to follow through. In the end, Airbnb decided to give guests 24 hours to pay, and asks hosts to wait three days while it processes the payment.

Airbnb has also added an option that allows Brazilians to pay for their bookings in installments, which is a common way to pay in that country. Guests can now split their bill into three separate credit card payments with different charge dates.

Of course, Airbnb could have made all of these changes almost instantly had it partnered with a big third-party payment processing company like PayPal. But instead, it has built a mini-PayPal within its own company, which means it works out each of these local payment snarls on its own (or with the help of local partners, much like PayPal would). To date, Airbnb accepts 32 different currencies, and it pays hosts in 65 different currencies.

Building these systems on its own is partly a way of controlling which fees get attached to transactions and when payments land in hosts’ accounts. But it’s also partly so that Airbnb can, say, make sure it is accepting local payments in Brazil before Rio hosts the Olympics (of which Airbnb is a sponsor).

“We would be beholden to someone else’s priorities,” says Airbnb’s payments product manager, Brian Wey, about using a third-party payments provider.”They are not going to expand to markets we need to expand at the right time.”