Venmo under FTC Scrutiny for ‘Unfair and Deceptive Practices’
May 2, 2016
PayPal disclosed in a regulatory filing late last week that its Venmo P2P payment service is under investigation by the Federal Trade Commission. In Thursday’s quarterly filing with the Securities and Exchange Commission, PayPal said it received a request from the FTC that it cooperate as the agency tries to determine if the hugely popular payment app is in violation of the Federal Trade Commission Act for “unfair and deceptive practices.” Neither PayPal nor the FTC has commented on the specific nature of the allegations against Venmo. PayPal, in a statement, acknowledged the investigation and its intention to cooperate.
“As a global payments provider, we are completely aligned with regulators in their efforts to ensure that consumers have positive experiences when using our services,” the statement said. “We consult and collaborate with regulators and work hard to comply with laws and regulations in the markets where we do business, around the world. We are cooperating fully with the Federal Trade Commission to address their requests for information.”
Venmo, which PayPal inherited when it acquired mobile payment processor Braintree, has become very popular with young consumers who want to pay each other using their smartphones. In January, the service processed $1 billion in payment volume in a month for the first time. And, in February, PayPal launched a pilot expanding the service beyond P2P as a way to pay merchants.