German banks temporarily blocked PayPal transactions worth potentially over 10 billion euros due to a technical failure, marking a reputational crisis for the company.
Paid Transactions Blocked
Suspected Payment Orders
As reported by the German newspaper Sueddeutsche Zeitung, banks in Germany halted payments using PayPal on Monday, potentially impacting over 10 billion euros in transactions. “This represents a reputational disaster for PayPal and a financial loss whose scale has yet to be determined,” the article states.
Potential System Failure
The newspaper explains that PayPal’s systems designed to prevent fraudulent withdrawals from customers’ accounts may have malfunctioned. German banks noticed millions of suspicious payment instructions sent by PayPal, such as unauthorized deductions following online purchases.
PayPal’s Popularity in Germany
Sueddeutsche Zeitung highlights that PayPal has over 30 million customers in Germany and is the most widely used method for online payments. In the previous year, nearly 30% of all internet transactions in the country were processed through PayPal.
Scammers Targeting PayPal
Scammers frequently attempt to exploit PayPal and withdraw funds from bank accounts. Typically, these frauds are detected by external security systems. However, PayPal’s security systems reportedly failed last week, allowing suspicious payment orders to be processed without checks.
Impact on Businesses and Verification Delays
Several German banks found the situation suspicious and temporarily halted transactions. This means sellers did not receive payments for their goods. Verifying these transactions could take several days. Industry experts estimate the total value of affected transactions could reach 10 billion euros.
Is the Issue Limited to Germany?
PayPal confirmed to the newspaper that technical problems did occur in recent days, affecting some transactions. The company assured that the cause has been identified and corrective measures are underway. However, Sueddeutsche Zeitung notes that such system failures are rare for large corporations, and it remains unclear whether the issue is confined to Germany or extends to other European countries.
Source: Gazeta, https://wiadomosci.gazeta.pl/swiat#anchorLink](https://wiadomosci.gazeta.pl/swiat#anchorLink), https://next.gazeta.pl/inwestycje/7, https://next.gazeta.pl/next/7, https://www.dw.com/pl/awaria-paypala-banki-w-niemczech-wstrzyma%C5%82y-transakcje/a-73780458](https://www.dw.com/pl/awaria-paypala-banki-w-niemczech-wstrzyma%C5%82y-transakcje/a-73780458)
