European banks have seen widespread unauthorized direct debits from PayPal accounts, the German Savings Banks Association (DSGV) says.
The German newspaper Sueddeutsche Zeitung (SZ) states that payments worth in the region of 10 billion euros (£8.6bn) have been blocked due to a failure in PayPal's fraud-checking systems. Payments were halted on Monday when lenders reported millions of suspicious direct debits from the payment firm.
The DSGV confirmed to the BBC that there were incidents involving unauthorized direct debits initiated by PayPal against various credit institutions. The BBC has reached out to PayPal for comments.
According to reports, PayPal's spokesperson indicated that certain transactions from its banking partners and their customers had been affected by a temporary service interruption and reassured that they are working closely with banks to update accounts. The DSGV stated that PayPal acknowledged the disruptions and assured that the problems had been resolved, with payments now functioning normally.
The impact of these incidents has been extensive across European banking systems, especially in Germany. The supervisory authorities have been informed of the incidents affecting PayPal.
PayPal aims to filter out fraudulent direct debits and scams through its security systems, which are designed to identify and block fraudulent transactions initiated by criminals. However, on the reported day, these systems did not operate effectively, allowing many unauthorized transactions to proceed alongside legitimate ones.
Following these reports, PayPal's shares fell by 1.9% on Wednesday.
The German newspaper Sueddeutsche Zeitung (SZ) states that payments worth in the region of 10 billion euros (£8.6bn) have been blocked due to a failure in PayPal's fraud-checking systems. Payments were halted on Monday when lenders reported millions of suspicious direct debits from the payment firm.
The DSGV confirmed to the BBC that there were incidents involving unauthorized direct debits initiated by PayPal against various credit institutions. The BBC has reached out to PayPal for comments.
According to reports, PayPal's spokesperson indicated that certain transactions from its banking partners and their customers had been affected by a temporary service interruption and reassured that they are working closely with banks to update accounts. The DSGV stated that PayPal acknowledged the disruptions and assured that the problems had been resolved, with payments now functioning normally.
The impact of these incidents has been extensive across European banking systems, especially in Germany. The supervisory authorities have been informed of the incidents affecting PayPal.
PayPal aims to filter out fraudulent direct debits and scams through its security systems, which are designed to identify and block fraudulent transactions initiated by criminals. However, on the reported day, these systems did not operate effectively, allowing many unauthorized transactions to proceed alongside legitimate ones.
Following these reports, PayPal's shares fell by 1.9% on Wednesday.
