Venmo
Venmo is an American mobile payment service founded in 2009 and owned by PayPal since 2013. Venmo is aimed at users who wish to split their bills. Account holders can transfer funds to others via a mobile phone app; both the sender and receiver must live in the United States. Venmo also operates as a small social network, as users can observe other users’ public transactions with posts and emoticons.[1] In 2021, the company handled $230 billion in transactions and generated $850 million in revenue.[2] Users can view transactions on the Venmo website but users cannot complete transactions on the website and you will need to complete transactions on a mobile phone using iOS or Android.[3]
By default, Venmo publishes every peer-to-peer transaction (excluding the amount), a feature shown by researchers to reveal sensitive details about users' lives in some situations.[4][5] In 2018, the company settled with the Federal Trade Commission (FTC) about several privacy and security violations related to this and other features, and made changes to the corresponding settings. However, Venmo continued to attract criticism for exposing users to possible privacy risks.[5][4]
Criticism and controversies[edit]
Privacy concerns[edit]
A 2018 study analyzed over 200 million public transactions and found that Venmo "reveals a massive amount of private details about users' lives by default".[5] The same year, the company reached a settlement with the FTC after the FTC had accused Venmo of "misleading" users about the privacy settings changes required to make transactions completely private.[5] In 2019, another researcher downloaded and analyzed seven million transactions, concluding that although Venmo had made some minor improvements limiting mass-scraping, the data still put users at risk for various forms of cyber attacks.[52][4]
In 2019, Mozilla and the Electronic Frontier Foundation wrote an open letter "to express our deep concern about Venmo's disregard for the importance of user privacy, and to call on Venmo to make two critical changes to its privacy settings: make transactions private by default, and give users privacy settings for their friend lists".[4]
Venmo's social model has attracted attention from researchers. A research group from University of Washington observed that the social feed in Venmo differs from other social networks in that activity is driven by financial transactions. A user could make a trivial transaction to make a post (e.g., sending someone $0.01, or requesting $0.02), but only one participant in their studies reported ever doing this. Further, neither reading the feed nor sharing a transaction memo publicly or with friends is necessary to send or receive money.
On Venmo, people transact with both friends and businesses via the app. Analysis of public transactions identifies a spectrum of use patterns, from regular users who create transactions for a variety of expenses, to niche users who use Venmo with a small cluster of friends to pay for just a few things (e.g., bills among roommates).[53]
A May 2021 investigation by BuzzFeed News reportedly managed to find the Venmo account of United States president Joe Biden after "less than 10 minutes of looking for it"; BuzzFeed News additionally states that the Venmo app "leaves everyone ... in the world exposed" and states that it reveals a major privacy concern.[54][55][56][57]
In 2022, Dr. Rajat Tandon and Dr. Jelena Mirkovic from the University of Southern California, along with their research collaborators, showcased that 2 in 5 Venmo users publicly reveal sensitive information. Their work, "I know what you did on Venmo: Discovering privacy leaks in mobile social payments",[58] which presents multiple findings from 389 million public transaction Venmo notes, highlights serious risks from a public-by-default policy for mobile social payments.
Consumer Financial Protection Bureau probe[edit]
Venmo came under scrutiny from the Consumer Financial Protection Bureau in 2021 over the company's treatment of their customers owing money for transactions. PayPal, the company operating Venmo's platform, announced through a regulatory filing in February that it had received a civil investigative demand from the CFPB "related to Venmo's unauthorized funds transfers and collections processes, and related matters." Venmo has a history of using aggressive tactics to threaten debt-owing users, ranging from seizing the funds from the user's other PayPal accounts to sending debt collectors after users. Customer service emails showed the company notifying users it could involve a collection agency over debts from $3,000 to as low as $7 in 2019, in some instances even when the customer in question had been scammed. Such practices continued during the COVID-19 pandemic.[59][60][61]