We have a situation where a customer was kiting with another bank account. We caught on and started putting holds on their deposits. Now we are seeing numerous Venmo deposits instead of deposits with checks written off of the other bank. The numbers are matching up; for instance, a $600 check was written to their business account at the other bank and we received a Venmo "Acct Fund" in the amount of $602.45.

Has anyone else seen this? Venmo deposits are immediate so we cannot hold the funds to stop the kite. Do we just wait on the other bank to realize what is going on? Our customer also has loans with us so we do not want to close the account yet.

We have a situation where a customer was kiting

And the account is still open - why? Kiting is illegal. That old "he has loans with us" is a lame excuse. It just means the loans are toast also if the customer has to kite to make ends meet.

Well... yes... but it is a little complicated. As I said, the customer has loans and direct deposits that ensure the loan payments are made. If the account is closed, loans will be in default. We could potentially notify them and remove access to P2P payments/credits on debit cards. Are there any other options or suggestions short of closing the account?

Back to the my original post though-has anyone else seen kiting using Venmo/Cashapp etc.?

Yes. If they fund their venmo transfers through a linked bank account instead of a debit card, then I believe there is potential for "float" and therefore kiting.

whether another bank has seen this or not is not really germane to your situation - you are seeing it, and are choosing to keep the account open because of other aspects of the account outside of the kite transaction. you will now need to spend more time monitoring the account to ensure the bank does not lose money in the kite. and really, for the $600 example you provided, is the extra effort worth it? are you saying that if the client doesn't have a bank account with you they can't pay their loans? that is a strange stance to take when you've identified a client is intentionally doing something illegal.

i have a loan from another bank where i have no accounts, i have no issues paying that loan every month. your client can be exited from your bank and still make loan payments, happens all over.