In January of this year, popular peer-to-peer (P2P) payment service, Venmo, crossed the incredible milestone of $1 billion in payments over the course of a single month. Owned by PayPal, Venmo has surpassed all Wall Street expectations. However, a recent development may prove to be a very unwelcome change of pace for the company.
It was recently disclosed by PayPal that Venmo is now under investigation by the Federal Trade Commission (FTC). PayPal explained that it received a request from the FTC on March 28th that it cooperate as an investigation goes underway; this investigation will determine whether or not the hugely popular payment app is in violation of the Federal Trade Commission Act for “unfair and deceptive practices.”
So far, neither the FTC nor PayPal has commented further to explain the specific nature of the allegations against Venmo. But PayPal has openly agreed to cooperate fully. According to PayPal, in response to the Civil Investigative Demand (CID) from the Federal Trade Commission, they are providing documents and answers to written questions.
In their statement, PayPal 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.”
So what does this mean for PayPal? It sounds like there could be trouble ahead. Depending on the outcome, there could be anything from legal fees to potential changes in the way Venmo functions – definitely not great news for a hit app.
So what does this mean for other businesses? Choosing safe and secure payment processing is crucial. Knowing what you’re getting into from the very beginning will save you from stress and headache later on. This is even more true for the business categorized as “high risk”.
While startups struggle to secure the merchant account they need to get started, others are suddenly informed their account has been shut down due to “risks” in servicing them. Fortunately, this is where high risk merchant account providers – like EMerchantBroker.com – have stepped in to offer industry leading payment processing solutions and business funding options. Don’t wait to make sure your business is prepared for a rainy day. Make sure it has the tools it needs to thrive and grow safely right now.