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Venmo’s Legal Woes, Walmart Pay On iOS, Goldman Goes Digital

Some news weeks are exciting, others are slow and still others are … well, others are last week.

In order, the following things happened last week:

Beyonce may have done her husband the greatest favor in the world by dropping an album about his infidelity, Ted Cruz named Carly Fiorina as his running mate days after mathematics eliminated him from becoming the Republican nominee, Apple whiffed harder in an earnings report than it has in 13 years and President Barack Obama dropped the mic on the press corps — literally.

The normal response to such an abnormal week is “wait, what’s going on here.”

Luckily for our readers, the Data Dive is here for you as it is every week to try to keep up with the answer to that very question — from a payments perspective of course.

So what to watch when so very much is clamoring for your attention?

Venmo may have managed to get itself into some trouble with the FTC – though how much, what for exactly and how worried parent company PayPal should be worried are a bit up in the air. Also in the mix, Walmart Pay has taken yet another step away from the theoretical toward the actual and Goldman Sachs went into digital banking.

Need to know a bit more? Good news for you.

Venmo’s FTC Troubles(?)

The week started so well for Venmo and PayPal.

The latest round of earning were especially kind and CEO Dan Schulman called it the firm’s “best quarter ever.” Venmo — the biggest and most successful P2P player thus far — was certainly one of the all-stars in that “best ever” performance, and at least a contender for MVP with One Touch.

But in one of the more classic good news-bad news pairings possible, a little over a day after all those glad tidings came and went, the not-so chipper news surfaced that Venmo many have managed to get itself into some trouble with the FTC .

Some trouble that is, at this point, a little unspecified.

On April 28, PayPal, Venmo’s parent firm, acknowledged that Venmo is currently under FTC investigation in an SEC filing.

“On March 28, 2016, we received a civil investigative demand (CID) from the Federal Trade Commission as part of its investigation to determine whether we, through our Venmo service, have been or are engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act,” the filing reads.

“The CID requests the production of documents and answers to written questions related to our Venmo service. We are cooperating with the FTC in connection with the CID.”

What exactly the issue is is not specified, nor is the seriousness of it, with a full range of possible consequences as a result of the investigation from essentially nothing to serious fines and changes to how the app operates.

“The CID could lead to an enforcement action and/or one or more consent orders, which may result in substantial costs, including legal fees, fines, penalties and remediation expenses and actions, and could require us to change aspects of the manner in which we operate Venmo.”

Venmo is not alone in its market space — Square, Google and Facebook all offer competing P2P services — through Venmo is, by far, the segment leader.

Venmo also finds itself in the company of digital and mobile-based financial services firms that caught the officially eye of regulators last week. The CFPB announced that it was officially investigating the possibility of placing the biggest marketplace lenders in the U.S. under its direct supervision within the next year or so. Though marketplace lenders are bound by CFPB (and FTC and SEC) rules, they do not have a dedicated federal regulator.

Yet.

Walmart Pay – Another Step Closer To Ubiquity At Walmart

After the big year-end announcement in December that Walmart Pay is coming soon to a POS that is, statistically speaking, within 15 minutes of 90 percent of American consumers, a lot of silence followed.

While the service did commence to testing in a handful of locations, the rest of the world had to wait.

It appears as though that wait might be coming to an end in the nearish future.

Walmart has updated its iOS application — this time, enabling Walmart Pay, which takes its place among new features offered by the retailing giant.

If Walmart Pay is in the app and ready to go, reported various sources last week, that means consumers now have the ability to check out, in-store, with a QR code prompt.

There are a couple of caveats to that.

Payments data is not stored directly in-app; instead, users tie their Walmart Pay account to their Walmart.com account and link their payment methods — in the form of credit or debit cards — to the app.

Walmart gift cards also work in-app.

Also not all locations are Walmart Pay ready as of yet.

Walmart has said all stores will be Walmart Pay compatible by the end of the year, but as yet has not been much more specific than that.

A launch for Android’s Walmart app is planned – also by the end of the year.

Among other additions to the app were paper receipts and streamlined returns in-store.

Goldman Sachs Goes Digital

Better late than never.

Goldman Sachs announced last week that it is officially entering the world of online retail banking with the launch of its own FDIC-insured, Internet-based savings bank called GS Bank.

The minimum account balance needed to start a GS Bank account is only $1 and is open to anyone with an Internet connection.

GS Bank is offering customers an annual yield of 1.05 percent, far above the average U.S. savings bank annual yield of .06 percent.

The platform was reportedly inherited by Goldman Sachs after its recent acquisition of a $16 billion book of deposits from GE Capital. The deal left Goldman with nearly 145,000 retail depositors, allowing the bank to open up “a different avenue to use, with a different orientation and a different tenor,” Goldman Chief Strategy Officer Stephen Scherr said.

“This transaction increases the funding diversification and strengthens the liquidity profile of Goldman Sachs and GS Bank,” Robin Vince, treasurer of the Goldman Sachs Group, said in a statement earlier this month. Vince called accepting deposits a “strategic priority” for the company, which is now in its fourth quarter of profit decline.

Seeking to reverse that trend, Goldman is moving on several new ventures; last year the firm moved into mobile phone software business by turning what was once just a collection of software for mobile phones developed in-house into a separate venture of which the company will hold a minority stake.

Synchronoss Technologies, a publicly traded software firm, manages the venture and leverages Goldman Sachs’ technology programs, called Lagoon and Orbit, to create advanced mobile solutions. Lagoon enables secure access to business applications from an employee’s mobile device, while Orbit is a collection of applications that support email and other services for remote use.

So what did we learn last week, other than the fact that truth is often stranger than fiction?

Times they are a-changin’ for digital FIs — and quickly, if recent trends hold. But then, the times they are a-changin’ for everybody — as both Goldman and Walmart can report his week — because while digital firms are learning about real world regulators, the “real world’s” most venerable players are trying to figure out how to play by the new digital rules that firms like Venmo are writing.

Interesting times abound.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the December 2019 Mobile Card App Adoption Study, PYMNTS surveyed 2,000 U.S. consumers for a reveal of the four most compelling features apps must have to engage users and drive greater adoption.

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