An apparent failure in PayPal's fraud-detection systems froze billions of euros in transactions across Germany. Banks detected a slew of unauthorized direct debits and reacted variably; some stopped all PayPal transactions, leaving roughly €10 billion in frozen payments. The German Savings Banks Association confirmed that PayPal assured the problem was resolved and that payments had been running smoothly since Tuesday morning, with affected customers informed directly. The DSGV said the unauthorized payments had a significant impact on transactions throughout Europe, particularly in Germany, though no confirmed reports emerged from other countries. PayPal remains the most popular online payment method in Germany, used for 28.5 percent of purchases.
Shoppers and merchants in Germany found themselves dealing with billions of euros in frozen transactions this week, thanks to an apparent failure in PayPal's fraud-detection systems. According to the Association of German Banks, the problem hit on Monday when banks noticed a slew of recent unauthorized direct debits from PayPal. The body said the banks responded in various ways, which is one way of putting it - the Süddeutsche Zeitung reported that some stopped all PayPal transactions,
A spokesperson for the German Savings Banks Association (DSGV), which represents hundreds of regional banks across the country, confirmed the issue to The Register. The DSGV said PayPal had assured it the problem was resolved, adding that PayPal payments had been running smoothly since Tuesday morning and the US payments platform was informing affected customers "directly." The DSGV said the unauthorized payments had a "significant impact on transactions throughout Europe, particularly in Germany."
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