German banks halted 10 billion euros in PayPal payments on fraud concerns

According to the reports on Wednesday, German banks stopped PayPal payments totaling over 10 billion euros ($11.7 billion) because they were worried about fraud.

The article stated, without citing its sources, that the payments were stopped Monday after lenders reported millions of questionable PayPal direct debits that surfaced last week.

In contrast to generally flat readings for the major Wall Street indices, shares of the U.S.-based payment app fell 2.5% during premarket trade. On its website, PayPal stated that a few accounts experienced transaction delays over the weekend due to a brief service outage. The issue has now been resolved,” the statement said in German.

Scammers attempting to steal money from banks are typically filtered out by the company’s security system.

The association also stated that supervisory authorities had been notified of the issues and that PayPal transactions for Sparkasse clients were proceeding normally as of early Tuesday.

Although it acknowledged being notified, the BaFin regulator gave no other information.

The regulator in Luxembourg, where PayPal Europe is headquartered, the Commission de Surveillance du Secteur Financier (CSSF), declined to comment on PayPal in particular. According to a spokeswoman, there aren’t any significant ongoing interruptions that call for the regulator to get in right now. $1 is equivalent to 0.8542 euros.

However, the Sueddeutsche Zeitung claimed that late last week, this system was either totally or mostly broken, causing the payments app to send banks unauthorized direct debits.

In a statement released on Wednesday, the Savings Banks and Giro Association of Germany, which represents over 300 regional savings banks and financial service providers, claimed that PayPal’s unapproved direct debits had a “significant impact on payment transactions” across Europe, but especially in Germany.