Venmo lost a lot of money due to payment fraud


Executives would have been concerned that the settlement would be large enough to undermine PayPal's overall profitability and cause it to lose analysts' estimates. They also knew that customers would be bothered by the measures used to control fraud. Product executive Ben Mills said he was "upset". Venmo had to "harm our customers" to control fraud, according to an e-mail.

PayPal is suggesting a slightly different story in public. A spokesman told WSJ that the increase in losses resulted from the introduction of new funds to Venmo in that quarter, and that the company's loss levels were below 0.35% in the quarter. They have fallen since then and are "below the general average" for PayPal, the spokeswoman added.

If the hole is needed, however, it illustrates the challenges that the Venmo is facing. Although the company may be synonymous with mobile payments for some, it is also expensive for PayPal. Venmo does not charge for most transactions and has only recently started charging for instant transfers. To have a healthy future in the long run, you may need to be aware of fraud and find more ways to generate cash.


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