What Payment Gateways do Companies Like Airbnb and Uber Use?

“What payment system does Airbnb use?”, “Who is the payment gateway and processor behind Uber?”, “What payment processor/gateway do big websites use like Uber, Airbnb, Lyft, Reddit, LinkedIn, etc?”

These are the typical questions, which are asked by many people on a regular basis. Most probably, you can find accurate answers to these and similar questions only if you consult the management of the aforementioned companies. We do not know the managers of these companies and, consequently, the answers to the listed questions. However, we feel that people, asking such questions, just want to implement payment processing logic, similar to the logic used by Airbnb and Uber, in their applications. In this article we will try to explain the essence of this logic, and provide guidelines for those, who search for similar solutions.

So, what is the common feature, which unites Airbnb, Uber, and other similar companies, emerging with every coming day?

Airbnb is a marketplace for accommodation rental, while Uber is a marketplace for transportation services. Vacation rental and online transportation networks are not the only business types. If we set company names aside, we can see that the common feature is an online marketplace business model. A marketplace is an online setting, where various small-size vendors offer their products and services to various customers. In cases of Airbnb and Uber these vendors are either individuals or small businesses, providing services to other individuals and small businesses.

Online marketplaces, generally, face a challenge when it comes to payment processing. When a customer makes a purchase the payment amount should, generally, be split between multiple parties. For instance, in the case of Uber, some part of the amount should be retained by the corporate office, providing the software product, while another part should go to the driver. The case of Airbnb is conceptually the same. In some other cases, the number of recipients may be larger. For example, tomorrow Airbnb may allow cleaning companies to register on the web-site and provide their services to accommodation owners. As a result, during each rental, the payment will include Airbnb’s share (payment for web-site/online marketplace operation), the accommodation owner’s share, and the cleaning company’s share. Moreover, some part of the payment may represent taxes. Distribution of such payments is a serious challenge. Making separate charges for each recipient from the customer’s card is undesirable.

The challenge around payment distribution is solved through split funding (or split payment) mechanism. Different companies offer this mechanism as a service on the market. For example, PayPal is offering adaptive payments, Stripe and some new payment gateway software providers (such as United Thinkers) support split payment functionality, while Zift offers such functionality to software vendors.

In most cases a company like Uber of Airbnb follows a classical payment facilitator model. Uber drivers (or Airbnb accommodation owners) are its sub-merchants that need to be funded. As the number of these sub-merchants is large, beside split funding, smooth merchant on-boarding, provisioning, and remittance logic is also extremely important.

For most present-day marketplaces the opportunity to automatically onboard and provision newly singed-up merchants (or sub-merchants) is extremely relevant. In the case of Airbnb these sub-merchants are accommodation owners, while in the case of Uber they are car owners. That is why another important technology alongside split payment mechanism is merchant on-boarding technology (otherwise provisioning of each new sub-merchant would be a laborious procedure).


If your company uses an online marketplace business model and you want to “replicate” the business operations mechanism of Uber or Airbnb, try to find a payment service provider that supports split funding mechanism, has a smooth merchant on-boarding system, and compiles clear merchant statements, that would be easily interpreted and used for reconciliation by your customers.

Online Marketplace Model

With the success of eBay, Uber, AirBnB, and other similar online marketplaces, the concept of an online marketplace is rapidly entering new industries. As a result many modern software companies are providing online marketplace software for these different industries. Consequently, the problem of payment handling in marketplace-type systems becomes more and more relevant.

What an online marketplace is

Online marketplace is a platform, allowing its users to exchange products and services, which is provided and supported by a third-party entity. Examples include eBay and AirBnB.
Plenty of different companies develop software for online marketplaces. However, the need for effective organization and support of complex payment processes at online marketplaces maintains its relevance.

The difference between an online marketplace and a conventional business

The main marketplace-specific problem is as follows. During a traditional transaction, when a customer pays a merchant for a purchase, the merchant receives the money with a small processing fee withheld. The fee is retained by the processor (the company that processed the payment).
In an online marketplace two conceptually new components were added to the above-mentioned simple transaction processing mechanism.

The first one is as follows. In an online marketplace situation there is an additional party involved that needs to be paid for the service vended. So, when the merchant is paid, a fee has to be withheld (as in the conventional model). However, it needs to cover not only the cost of processing, but the cost of the service of the marketplace. Let us use examples to illustrate the difference.

Example 1

John purchases a T-shirt for $20 in a store and pays with his credit card. The store receives $19, while $1 is withheld by the bank that handles credit card processing for the store.

Example 2

John buys a $20 T-shirt at an online marketplace. The merchant receives $18.50. $1 goes to the bank that processed the transaction, as in Example 1. However, $0.50 from the transaction needs to go to the marketplace owner.
While it is possible for the marketplace to collect its fee as a monthly subscription, or as a separate (second) transaction, it is preferable to be able to withhold just one fee from the main transaction, and then – split it among any other parties, such as affiliates, that are involved.

Moreover, the marketplace owner is not the only new player in comparison to a conventional business.
Another important thing to consider, when dealing with marketplaces, is the affiliates. We are talking about third-party blogs and web-sites, which handle the promotion of different products (ads, which we see in blogs, leading to online marketplaces like Amazon and eBay, provide vivid examples of such promotions). Say, a blogger writes about different cleaning products and detergents. She writes about unique cleaning products, and references a link to the web-site (online marketplace), where these products can be purchased. It is expected, that the blogger is going to receive some small commission of every purchase that is made through the link from her blog.

Example 3

John smears his newly-bought T-shirt, goes online and finds the blog, providing some useful information on where effective detergents can be purchased. He clicks on the link in the blog and purchases the detergent at the online marketplace. Now, beside the fees, the bank and the marketplace owner are entitled to, the blogger should also get her small share of the transaction amount.

As we can see, the traditional transaction processing model does not fully meet the needs of an online marketplace. Online marketplaces have a need for split funding, i.e, they require the ability to split an original transaction into multiple sub-components (smaller payments), that can be distributed among different parties, such as affiliates.


If you want to build your business in accordance to the online marketplace model, you need to select the right payment processing partner, who, potentially, is capable of providing flexible split funding functionality. Although you can go with a traditional processor and build the split funding logic yourself, you are likely to experience many challenges, and still the process might not be transparent enough. Consequently, it might be better and more profitable for you to partner with a payment platform, which already supports split payment functionality. It might also be useful for you to check, if a payment facilitator model is the right one for you.
In the next article we are going to address two basic split funding models.