The next time your friend offers to pay for lunch and split the bill via Venmo, an online money transaction service, pause for a minute before hitting pay.
Does your caption contain the words “Cuba” or “Havana”? Unless you like having your account frozen, it might be worth a rewrite.
Venmo, the PayPal-owned app, has been known to flag transactions with vague mentions of potentially illegal activity — like drugs, sex work or sending money to banned countries. Companies that process monetary transactions have to abide by U.S. rules and sanctions, including the economic embargo against Cuba.
So think twice before identifying that Cuban sandwich you had for lunch.
Flagged users have their transaction frozen and get an email from the company asking for “a complete and detailed explanation” of what was paid for, sometimes including a link to the specific restaurant.
The upset customers who take to social media and complain may be a hassle for the company, but it’s better than the alternative. In 2015, PayPal paid a nearly $8 million settlement to the United States over allegations that the company violated sanctions by processing thousands of dollars of transactions to and from Cuba, Iran and Sudan.
A Venmo spokesman wouldn’t go into detail on the review process, or whether the company has ever actually caught anyone attempting to send money to the country, but he said the company appreciates customers’ patience as it addresses its regulatory obligations.
“PayPal and Venmo take regulatory and compliance obligations seriously, including U.S. economic and trade sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC). We’re always working to make it safe and easy for people to send and receive payments to and from those they trust. Our goal is to deliver as seamless of a payments experience as possible while we do our job to keep PayPal, the public, and our customers safe. We realize any delay in making or receiving a payment can be frustrating, and we appreciate our customers’ patience as we comply with our regulatory obligations.”