European Banks Block €10 Billion in PayPal Payments After Fraud Filter Failure #
Banks across Europe, led by German savings institutions, temporarily blocked more than €10 billion in PayPal direct debits after a malfunction in PayPal’s fraud detection system flagged millions of legitimate transactions as suspicious. The disruption on Monday caused widespread delays before PayPal restored services the following day. Regulators including Germany’s BaFin and Luxembourg’s CSSF were notified but took no action as the issue was resolved quickly
The incident highlights PayPal’s critical role in European payment infrastructure and the risks tied to automated fraud filters at scale. Experts suggest regulators may now intensify scrutiny of payment providers to ensure stronger safeguards against systemic outages.