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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 PayP
by 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 agoAlso 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 agoI 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 agoYes, 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.