PayPal (PYPL) - Get Report is just starting to roll out its new solution for merchants, Pay With Venmo, but the service is already getting a lot of attention from analysts who believe the service could be lucrative as early as 2017.

Pay with Venmo, which PayPal first announced in its third-quarter conference call last year, will take advantage of the popular app Venmo, which currently enables peer-to-peer payments, and allow merchants to accept it as payment. Venmo's core peer-to-peer service doesn't cost its users anything, so the company doesn't make money from it, but PayPal is hoping that Pay with Venmo will change that, and analysts have high hopes for the new service.

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In November, Jefferies analysts estimated that in 2017 Pay with Venmo could boost PayPal's revenue by as much as 2.4% and its earnings by as much as 4.2%, but the analysts have now updated those numbers after surveying 1,000 Venmo users. Now the analysts believe Pay with Venmo could add as much as 5.5% to 2017 earnings and as much as 3.1% to 2017 revenue.

Of the Venmo users surveyed, 67% said they would use Pay With Venmo at least once or twice per month, with 19% saying they would use it 6-10 times per month and 8% saying they would use it more than 10 times per month. Only 5% said they would never use it.

"Based on the results of our survey, we are more bullish on the potential usage rates of Pay With Venmo," the analysts wrote in a note on Monday morning. "Alongside the incremental EPS accretion, we believe increased traction of Pay With Venmo could also drive further multiple expansion."

The only concern Jefferies analysts took away from their survey was that Pay With Venmo could potentially take away from other PayPal usage. Seventy-six percent of the respondents have used PayPal in the past year at least once, and it's unclear if they would stop using it in favor of Pay With Venmo.

"It is difficult to ascertain whether or not Pay With Venmo will cannibalize a material portion of existing online PayPal spend," the analysts wrote. "Clearly, the online channel (and more specifically, the mobile channel) continues to take share from in-store consumer spending, so the expanding size of this 'pie' should mean there is adequate room for both traditional PayPal and Pay With Venmo volume to grow handsomely in the coming years. But, we did factor some cannibalization into our updated Pay With Venmo scenario analysis."