PayPal Partners with Banks to Resolve Payment Outage in Germany

PayPal is working with banks to resolve issues after a payment outage in Germany. The company enables online transactions and offers payment services through its PayPal, PayPal Credit, Venmo, and Braintree brands. Net sales are generated from transactions and value-added services, with the majority coming from the US.

PayPal Holdings Inc (PYPL.O) has resolved widespread payment disruptions in Germany, following a technical issue that halted transactions through several major banks. The company, which enables online transactions and offers payment services through its PayPal, PayPal Credit, Venmo, and Braintree brands, apologized for the inconvenience and assured users that the problem has been addressed [1].

The disruption, which occurred on Monday, affected transactions worth approximately 10 billion euros ($11.71 billion) and raised concerns about the reliability of PayPal's app for online transactions in Germany. German banks had halted payments due to concerns over PayPal's security system, which was not vetting transactions for potential fraud [1].

PayPal stated that it is working closely with its banking partners to resolve any discrepancies on customers' accounts and ensure that all legitimate merchant transactions are fully remunerated. The company did not comment on the cause of the problem [1].

The disruption has sparked discussions about the importance of resilient payment systems in Germany. A spokesperson for the German finance ministry declined to comment on whether Europe should develop an alternative to PayPal but emphasized the need for robust payment systems [1].

Raymond James, which maintained its Market Perform rating on PayPal's stock, estimated that each day of disruption could create a 10 basis point headwind to PayPal’s third-quarter Branded Total Payment Volume (TPV) growth. Germany represents about 5% of PayPal’s total TPV, with approximately 60% of that volume being Branded. The analysis is based on Statista’s projection that the German e-commerce market will reach approximately $105 billion in 2025 [2].

Despite the disruption, PayPal reported its second-quarter earnings, exceeding expectations in headline revenue, transaction profit, and non-GAAP earnings per share. However, some analysts expressed concerns over transaction margins and a slowdown in branded online total payment volume growth. KeyBanc Capital Markets maintained a Sector Weight rating, citing issues with transaction margins and a slowdown in branded online total payment volume growth, partly due to tariffs. Truist Securities reiterated its Sell rating, pointing to concerns over the quality of PayPal’s growth drivers. Mizuho adjusted its price target for PayPal to $84, maintaining an Outperform rating but noting a modest deceleration in total payment volume growth. Meanwhile, Keefe, Bruyette & Woods kept its Outperform rating, raising earnings per share estimates for 2025 and 2026 due to higher net revenues and a lower tax rate [2].

References:
[1] https://www.reuters.com/sustainability/boards-policy-regulation/paypal-says-it-is-working-with-german-banks-after-widespread-payment-disruption-2025-08-29/
[2] https://www.investing.com/news/analyst-ratings/paypal-stock-faces-temporary-disruption-in-germany-raymond-james-notes-93CH-4213165