PayPal Resolves German Payment Disruption, €10 Billion Transactions Cleared.

PayPal has resolved the payment disruption in Germany after local banks blocked €10 billion in transactions due to suspicious direct debits linked to the payment app. The company apologized for the inconvenience and is coordinating with its banking partners to ensure legitimate transactions are fully credited. The incident has raised concerns about the reliability of PayPal and the need for resilient payment infrastructure in Germany. Shares of PayPal were down 1.9% in early New York trade on Friday.

PayPal has resolved a significant payment disruption in Germany after local banks blocked €10 billion in transactions due to suspicious direct debits linked to the payment app. The company acknowledged the issue and is coordinating with its banking partners to ensure legitimate transactions are fully credited. The incident has raised concerns about the reliability of PayPal and the need for resilient payment infrastructure in Germany.

The disruption, first reported by Sueddeutsche Zeitung [1], occurred on Monday when lenders detected millions of suspicious payments related to PayPal. The company confirmed the service interruption and stated that the issue has since been rectified. PayPal's usual fraud detection systems, designed to identify suspicious activity and filter out false positives, were either fully or largely disabled, allowing fraudulent activity to reach banks and triggering significant disruption.

Germany’s Savings Banks and Giro Association reported that PayPal transactions for Sparkasse bank customers had returned to normal by early Tuesday. The association noted that unauthorised direct debits from PayPal had caused a "significant impact on payment transactions" across Europe, with Germany particularly affected. The German financial regulator BaFin was informed but declined to provide further details.

The incident has highlighted the importance of robust payment infrastructure and the need for continuous improvement in fraud detection systems. PayPal's shares were down 1.9% in early New York trade on Friday, reflecting investor concerns over the reliability of the payment platform.

References:
[1] https://www.investing.com/news/analyst-ratings/paypal-stock-faces-temporary-disruption-in-germany-raymond-james-notes-93CH-4213165
[2] https://cryptorank.io/news/feed/f56de-german-banks-block-over-e10b-in-paypal-payments-amid-fraud-fears
[3] https://www.ainvest.com/news/paypal-stock-pypl-falls-10b-transaction-freeze-security-concerns-2508/