How Venmo Is Used for Gambling, Sex and Drug Payments, Report

The evolution of digital payment platforms makes it easier to pay without cash for a range of activities or products. From paying at McDonalds, shopping online and even placing a bet via online casino or a bookmaker, digital wallets sure make cash obsolete.

Avoiding Cash, Even Illegal Bookmakers and Drug Dealers Use Digital Payment Platforms

There’s a popular saying “Cash is king,” but that may no longer be the case in the digital world, where many prefer to pay thousands of dollars at the touch of a screen without the need to carry paper currency. However, there’s a dark side to payment platforms and it revolves around their use of unlawful activities, such as buying and selling drugs or illegal gambling. In some cases, sex workers also prefer digital payment platforms as a more reliable way to collect payment from customers instantly.

Now, a new report by Forbes focuses on the convenience of payment platforms such as Venmo. Unlike the standard uses of the platform for hedonistic activities such as paying for TV subscriptions, food or shopping online, the media analyzed the use of Venmo for illegal gambling, sex services and even the purchase of illegal substances such as cocaine or weed, among others.

PayPal, Venmo’s owner, currently doesn’t offer statistics on what percentage of the platform’s transactions may be used for vice-related transactions. An estimate by Forbes, not confirmed by Venmo or PayPal, suggests that such transactions may represent less than 1% of the platform’s total transactions. While less than 1% sounds like an insignificant figure, in 2023, Venmo’s transactions hit $270 million. This means that if the estimate is correct, roughly between $1 and $2 billion in transactions annually may be related to vices such as illegal gambling, sex or drugs.

Convenience Comes at a Cost: Digital Platforms Record All Transactions

The popularity of digital payment platforms offers convenience not only to those who are seeking vice-related products or services but also to those who are offering. Sex workers, women who use the popular platform OnlyFans, paid escorts, illegal bookmakers and even drug dealers find it easier to receive money from customers online than dealing with cash.

In some cases, users who send money are asked to submit a note with a description. Not unexpectedly, drug dealers or illegal bookmakers wouldn’t submit an honest note to the respective transaction. On the other hand, friends who want to prank each other may sometimes jokingly write drugs or expletives.

While convenient to those who offer and receive products and services that may be illicit, digital payment platforms trace each and every transaction. To use Venmo, customers need to connect their account to a real bank account using a real name.

This otherwise means that if a person sells unlawful substances such as weed for example, and they are caught, law enforcement can easily uncover all transactions related to their account. The same goes for illegal bookmakers who may prefer to use the digital platform rather than accept cash.

Ultimately, scrutinizing payment platforms may prove to be beneficial, especially for law enforcement. The analysis of a single account used for unlawful activities can help police identify additional suspects and even bring down large-scale drug distribution or illegal gambling operations.