US consumer watchdog probing PayPal-owned Venmo app

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A US consumer watchdog is investigating PayPal-owned money transfer app Venmo’s funds transfers and collection processes, a new regulatory filing showed.

PayPal said it received on January 21 a Civil Investigative Demand (CID) from the Consumer Financial Protection Bureau (CFPB) in the US related to “Venmo’s unauthorised funds transfers and collections processes, and related matters.”

It has asked the company to produce documents and answers to written questions.

PayPal said that it is cooperating with the Consumer Financial Protection Bureau in connection with this Civil Investigative Demand.

The company generates revenue from consumers on fees charged for foreign currency conversion, optional instant transfers from their PayPal or Venmo account to their debit card or bank account, interest and fees from its PayPal Credit products, and other miscellaneous fees.

In case, a Venmo user’s account becomes overdrawn, it may be referred to collections, The Verge reported.

According to a 2019 report in The Wall Street Journal, Venmo continued to pursue collections against users who may have been the victims of scammers.

PayPal last week reported a strong growth in the fourth quarter of 2020 with a revenue of $6.12 billion.

It reported total payment volume (TPV) of $277 billion, growing 39 per cent. It added 16 million Net New Active Accounts (NNAs) in the fourth quarter.

In the regulatory filing PayPal said that it intends to further enhance its PayPal and Venmo digital wallets to increase their functionality and drive higher engagement on its Payments Platform.

PayPal last week said it is winding down its domestic payment services in India from April 1.

-IANS


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