Venmo Money has suffered $40 million loss in 1st three months of 2018 and continued to struggle after that. Venmo has really been in plagued by the payment frauds according to the WSJ reports. That figure is 40% more than the anticipated one by the company, that much of the loss to the fraud payments.
It’s not clear by the documents that from where the fraudulent activities have happened, whether those were through accounts hack, stolen cards or other scams Most of the times in frauds, Venmo Money’s policy is to give the money back to their customer which has been lost through a fraud. This means the company really continues to lose.To overcome this issue the Venmo blacklisted those all thousands of accounts which has been flagged as suspicious.
Moreover, the company first delayed and then pulled the instant payment transfer feature which usually let users transfer the funds to their bank accounts in between 30 minutes. They were teasing this feature since June 2017, as a reaction to another app named as ZELLE which is banks backed payment app, was to be released in January this year but then they put it on hold in March this year. Venmo Money said that they needed to make few changes in it but now it’s cleared that those were due to fraud.
Payments being made through Venmo’s websites have been discontinued for the customers. Even though these were holding only 2% of all the transactions being made, but contributed 15% of the losses. The earnings quarter 3 of PayPal were reported in the mid of October, at the same time, Over $1 billion worth of instant payments transfers were made in September before the new fee was changed. But the next payments report is expected to come at the end of January which will be used to figure out whether the fee changes can help to cover the losses suffered in 2018.
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