Venmo lost a lot of money because of a payment fraud

Leaders worried that the results would be large enough to hurt PayPal's bottom line and cause them to miss out on their estimates. They also knew that the measures taken to control the fraud would have annoyed the customers. The product executive, Ben Mills, said he was "pissed off," according to an email, Venmo has "hurt our customers" to control the fraud.

PayPal suggests a slightly different story in public. A spokesperson told the WSJ that the increase in losses resulted from the introduction of new features on Venmo during this quarter and that the payment company's loss levels were less than 0.35% for the quarter. They have since dropped and are "below average" for PayPal, the spokeswoman added.

If the scoop is accurate, it illustrates the challenges that Venmo faces. If the company can be synonymous with mobile payment for some, it is also expensive for PayPal. Venmo does not charge for most transactions and has recently started billing instant transfers. To ensure a healthy future in the long run, fraud may need to be closely monitored and more ways to generate money be found.