Paypal payment blocks have a lasting effect

In the middle of the week it became known that German banks had blocked Paypal payments for security reasons – Systems for filtering fraudulent transactions had failed, whereupon the banks' anti-fraud systems kicked in and stopped all Paypal transactions in response. Paypal claims that the problems have been resolved. However, the resolution is still ongoing. Not all companies are accepting Paypal transactions again.

In a statement on Friday, the payment service provider apologized "for the inconvenience caused by the current events". Paypal further explains: "When problems occur, consumers and merchants are supported by our buyer and seller protection. The disruption has now been resolved and we are working closely with our banking partners to resolve any discrepancies on customers' accounts. All legitimate merchant transactions will be fully refunded."

However, the situation has still not been clarified. According to Focus, the Otto retail group, for example, is currently suspending payments via PayPal. The payment processor Helaba for the Sparkasse Group explained that individual payments are being checked manually to avoid double bookings – this can apparently take time due to the volume of transactions. According to the EHI Retail Institute, Paypal payments account for almost 30 percent of German e-commerce sales and are at the top of the list. The e-commerce association BEVH also stated that retailers are not automatically reimbursed for their payments.

Politicians call for the development of alternatives

Die Zeit currently reports that politicians with a focus on consumer protection are calling for the development of European alternatives across party lines. Calls for European independence from US dominance in the digital world are becoming louder. With the European payment service Wero, however, at least one is already available. The massive Paypal incident may now be helping the service to make a breakthrough.

Paypal is trying to solve the problems that have arisen in the interests of its partners and customers. In a background interview with heise online, the company confirmed that it is working at full speed to resolve the consequences of the incident. However, the company has not yet been able to comment on what will happen to the threatened bank charges for rejected payments. Paypal was also unable to provide a concrete answer whether merchants will have to take action or will automatically receive outstanding payments. As soon as Paypal comments on this, we will update the message here.

Meanwhile, some financial institutions are warning about the Paypal disruptions. If payments are rejected, consumers should contact Paypal's customer service, they say. Furthermore, It is possible that unauthorized debits have been made by PayPal. Merchants and customers are therefore well advised to check their accounts for potentially unauthorized debits via PayPal.

The Sparkasse, for example, mentions that the supervisory authorities have been informed about the incident. The German banking regulator told heise online: "BaFin is aware of the incident. We are in close contact with the institutions." As Paypal operates in Europe from Luxembourg, the supervisory authority there is responsible. The Commission de Surveillance du Secteur Financier (CSSF) told heise online that one of its tasks is to "minimize business disruptions and ensure financial stability, market integrity and consumer protection". The authority went on to explain that there were no major disruptions that would require the CSSF to intervene to achieve these objectives.

(dmk)