PayPal has revealed that it is cooperating with the US consumer watchdog over a civil investigation relating to its app, Venmo. The investigation is into Venmo’s “alleged unauthorized fund transfers and collections processes”.

Venmo is a popular mobile app for peer-to-peer payments in the United States. It was founded in 2009 and allows users to pay each other without exchanging cash or write a cheque. The app employs peer-to-peer technology to send money online but needs its users to connect a debit or credit card to the app.

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It rivals apps like CashApp, run by payments processor Square. Venmo has been a part of PayPal since 2013. The company processed about $47 billion in total payments volume in the fourth quarter alone. That is a 60% increase from the previous year.

The US Consumer Financial Protection Bureau made the civil investigation demand into the digital payment processor in January 2021 according to PayPal. A Civil Investigation Demand is a legal request for records and documents or other information related to an agency investigation.

The civil investigation demand comes just two days after PayPal said on its fourth-quarter earnings call that it will add support for cryptocurrencies to Venmo. The app had said that it was rolling out the feature “in the coming months”. PayPal had also said that it would be dedicating a new business unit to cryptocurrency.

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