4 ms·

What's so specific to German banks ?

by hirako2000 1y ago

n1b0m 1y ago
PayPal is the most important online payment service in the German market, with nearly 30% of online purchases made using the platform. The sheer volume of PayPal and direct debit transactions in Germany magnified the impact of the outage compared to other markets. With millions of potentially fraudulent debit requests appearing simultaneously, German banks chose to freeze all incoming PayPal direct debit payments. This was a necessary step to protect their customers from what appeared to be a massive, systemic fraud event.
- tgsovlerkhgsel 1y ago
  Also protect themselves (or rather, PayPal's bank). These were almost certainly SEPA debits. Consumers could reverse unauthorized transactions (think "chargeback" but on steroids - customer says to revert, it gets reverted, no discussion) and their bank would then have to try to get the money from PayPal's bank, which would then have to get it back from PayPal.
  - tomschwiha 1y ago
    I think the bank of the consumer is also completely automatically getting the money back. The risk is on the initiator if the payment (=PayPal).
    - tgsovlerkhgsel 1y ago
      Yes, I may not have described it well. The "try" only refers to "if the other bank is bankrupt, they get stuck with the loss" - they don't have to argue with the other bank. So unless PayPal's bank fails, it's a very simple process for the customer's bank. In general, the bank of the entity initiating the debit will only let someone initiate debits to the extent to which they'd be willing to give them a loan.
galleywest200 1y ago
The article is from a German publication, which is probably why the focus is on German banks.
hirako2000 1y ago
Thank you. I'm not in Germany but could not withdraw to any (UK) banks for days. From Paypal that is. It is now restored but no entry in the list would show like it normally does. Makes sense Germany would be particularly impacted, seems like the UK to agree was as well. It is restored now though.
seb1204 1y ago
Germany seems to actively resist to modernize on all electronic fronts. Banks still charge you for transactions and they take 24hrs plus while in other countries they are free for private accounts and within seconds. This lack on the market has made unregulated services such as PayPal big.
- kuschku 1y ago
  I'm not sure which bank you're using, but even Sparkasse and Commerzbank have long supported free SEPA ICT (and it's becoming mandatory at the end of the year).
- perlgeek 1y ago
  I've been doing online banking with German banks since at least 2002, and never payed a single cent in fees for transfers. Funnily enough when I spent some time in Scotland in 2007 I opened a local bank account there, and OMG: * they charged a fee for receiving a SEPA transfer from Germany * they didn't give me a debit card or credit card, all I could do was withdraw money at the ATM or pay with paper-based cheques (!) * when I asked them how to transfer money to my university, they looked at me quiet shocked and said "but their account is at a different bank!". The bank teller there didn't even know if they supported cross-bank money transfers, and had to ask a colleague. Turns out they did, but at exorbitant fees (25 GPB, iirc) German banks aren't as modern as I'd want them to be, but transaction fees aren't a practical problem for most of us.

What's so specific to German banks ?

PayPal is the most important online payment service in the German market, with nearly 30% of online purchases made using the platform. The sheer volume of PayPal and direct debit transactions in Germany magnified the impact of the outage compared to other markets. With millions of potentially fraudulent debit requests appearing simultaneously, German banks chose to freeze all incoming PayPal direct debit payments. This was a necessary step to protect their customers from what appeared to be a massive, systemic fraud event.

tgsovlerkhgsel 1y ago
Also protect themselves (or rather, PayPal's bank). These were almost certainly SEPA debits. Consumers could reverse unauthorized transactions (think "chargeback" but on steroids - customer says to revert, it gets reverted, no discussion) and their bank would then have to try to get the money from PayPal's bank, which would then have to get it back from PayPal.
- tomschwiha 1y ago
  I think the bank of the consumer is also completely automatically getting the money back. The risk is on the initiator if the payment (=PayPal).
  - tgsovlerkhgsel 1y ago
    Yes, I may not have described it well. The "try" only refers to "if the other bank is bankrupt, they get stuck with the loss" - they don't have to argue with the other bank. So unless PayPal's bank fails, it's a very simple process for the customer's bank. In general, the bank of the entity initiating the debit will only let someone initiate debits to the extent to which they'd be willing to give them a loan.

galleywest200 1y ago

The article is from a German publication, which is probably why the focus is on German banks.

hirako2000 1y ago

Thank you. I'm not in Germany but could not withdraw to any (UK) banks for days. From Paypal that is. It is now restored but no entry in the list would show like it normally does. Makes sense Germany would be particularly impacted, seems like the UK to agree was as well. It is restored now though.

seb1204 1y ago

Germany seems to actively resist to modernize on all electronic fronts. Banks still charge you for transactions and they take 24hrs plus while in other countries they are free for private accounts and within seconds. This lack on the market has made unregulated services such as PayPal big.

kuschku 1y ago
I'm not sure which bank you're using, but even Sparkasse and Commerzbank have long supported free SEPA ICT (and it's becoming mandatory at the end of the year).
perlgeek 1y ago
I've been doing online banking with German banks since at least 2002, and never payed a single cent in fees for transfers. Funnily enough when I spent some time in Scotland in 2007 I opened a local bank account there, and OMG: * they charged a fee for receiving a SEPA transfer from Germany * they didn't give me a debit card or credit card, all I could do was withdraw money at the ATM or pay with paper-based cheques (!) * when I asked them how to transfer money to my university, they looked at me quiet shocked and said "but their account is at a different bank!". The bank teller there didn't even know if they supported cross-bank money transfers, and had to ask a colleague. Turns out they did, but at exorbitant fees (25 GPB, iirc) German banks aren't as modern as I'd want them to be, but transaction fees aren't a practical problem for most of us.