European banks have seen widespread unauthorised direct debits from PayPal accounts, the German Savings Banks Association (DSGV), BBC has learned.
German banks blocked PayPal payments worth more than 10 billion euros ($11.7 billion) due to concerns about fraud, the Sueddeutsche Zeitung newspaper reported on Wednesday.
The payments were halted on Monday after lenders flagged millions of suspicious direct debits from PayPal that appeared last week, the newspaper said, without specifying its sources.
„PayPal had a temporary service interruption that affected certain transactions of our banking partners and possibly their customers,” the Sueddeutsche Zeitung quoted a PayPal spokesperson as saying.
PayPal said on its website that a temporary service interruption caused delays in transactions for a small number of accounts over the weekend. „The issue has now been resolved,” the statement said in German.
The company has a security system that usually filters out scams trying to extract money from banks.
But the Sueddeutsche Zeitung said this system was either completely or largely disrupted late last week, meaning the payments app was sending unvetted direct debits to banks.
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