Venmo experienced a surge of fraudulent payments this year that contributed to a 40% greater loss in the first quarter of 2018 than the company anticipated, the Wall Street Journal reports. The losses from the increase in fraud were so significant that executives worried that PayPal, which owns Venmo, could miss its first-quarter earnings estimates as a result, according to the Journal. Concerns about fraud also led the company to suspend some features, such as the ability to send and receive money from a desktop computer, angering users.
The Journal article says Venmo’s struggles show that innovations in digital payments lead to novel avenues for fraud. But they also show that fraud in financial technology isn’t confined to emerging areas like cryptocurrencies and can disrupt even relatively established services such as Venmo.