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Digital payment platforms such as Venmo work great for sharing a dinner bill with friends, buying gifts at a pop-up shop or making payments without cash or credit cards.

But these digital payment platforms have a dark side: They can be misused for drug dealing and other illicit activity, suggest researchers from the University of California, Davis. And social media apps such as TikTok and Instagram can act as marketing tools for digital drug dealing.

“While platforms like Venmo revolutionize financial interactions, they also highlight the need for ongoing vigilance and adaptive regulatory measures,” said Pantelis Loupos, assistant professor of marketing and business analytics in the �°������ϲ���Ļ��Ϣ Davis Graduate School of Management and co-author of a paper published in October. “This study serves as a reminder to maintain awareness of our digital footprints and to engage with digital services responsibly.”

By analyzing 23 million transactions of 2 million users over two years on Venmo, the most popular peer-to-peer payment platform in the United States, researchers found that at least 83,068 unique users were using drug-related emojis, words or street slang. Researchers looked for terminology derived from sources that included the U.S. Drug Enforcement Administration, identifying commonly used terms and emojis.

The “Social drug dealing: how peer-to-peer fintech platforms transformed illicit drug markets,” was published in the Annals of Operations Research.

In their analysis, Loupos and co-authors used text and social network analytics to identify both participants who use the app for drug dealing only, and those who use it for a variety of transactions that include legitimate transactions as well as drug purchasing or selling. In order to be considered a statistically valid sample, at least 10% of all transactions of a Venmo user had to contain at least one illegal word or emoji, and each of those users had to have at least 50 transactions. The analysis encompassed transactions between 2013 and 2015.

People who purchase drugs on Venmo often use code words or emojis to indicate the type and quantity of drugs they are buying. Researchers observed that users might use a pill or syringe emoji, and use slang terms like “greens,” “blues” or “shrooms” to refer to various drugs. Similarly, quantities of drugs might be disguised using coded language such as “pizza” for a kilogram of cocaine or “cupcakes” for a small amount of marijuana. Researchers also came across euphemistic phrases like “pay for dinner” or “pitch in for gas” to describe transactions in messages.

“This study underscores the dual-use nature of fintech platforms and highlights the innovative ways in which such services can be co-opted,” Loupos said. “More importantly, it provides law enforcement and regulatory bodies with a deeper understanding of digital transaction patterns, aiding in the development of more effective countermeasures.”

Co-authors include Jörn Boehnke of the �°������ϲ���Ļ��Ϣ Davis Graduate School of Management and Ying Gu of the Foster School of Business, University of Washington, Seattle.