PayPal Holdings said Friday (Feb. 5) its payments app Venmo was being investigated over allegations of unauthorized fund transfers and collections processes. The company told Reuters that it is cooperating with the U.S. Consumer Financial Protection Bureau (CFPB) civil investigation demand.
The demand was made last month, the digital payment processor said in a regulatory filing.
Enforcement at the CFPB may pick up in the near future, as the Biden administration puts its stamp on the consumer agency. Biden has nominated Rohit Chopra, a commissioner at the Federal Trade Commission (FTC), to lead the CFPB. He would potentially replace Kathy Kraninger as director (who remains in her post in a term that technically runs through 2023).
For its part, PayPal posted fourth-quarter results Wednesday (Feb. 3) that showed total payments volume stood at $277 billion across 4.4 billion transactions. Dollar volume was up 39 percent year over year.
In the fourth quarter, Venmo, which has been part of PayPal since 2013, processed about $47 billion in total payments volume, up 60 percent from last year. Active accounts were up 32 percent to 70 million.
The mobile app Venmo is popular for person-to-person payments in the U.S. Its rivals include apps like Cash, which is operated by payments processor Square Inc.
CEO Dan Schulman said the “digital-first world is no longer our future. It’s our current reality and it will forever change the way we interact across almost all elements of our lives.”
The number of iPayPal’s accounts continues to rise. The company said that at the end of the quarter, it had 377 million active accounts — with new, active accounts up by 16 million in the quarter.
Looking ahead, the company expects to add another 50 million net new accounts this year, according to Schulman. He said the company saw continued strength in the over-50 age group.
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