German banks have blocked PayPal payments totalling over EUR 10 billion due to fraud concerns, the Sueddeutsche Zeitung newspaper reported, without specifying its sources.
The payments were halted on August 27, 2025, after lenders flagged millions of suspicious direct debits from PayPal that appeared last week, the newspaper reported. Among the institutions that reported the incident are DZ Bank and BayernLB, which stopped payments exceeding EUR 10 billion.
A banking source, who remained anonymous, told Reuters that the value of payments stopped by banks ranged from hundreds of millions to billions of euros.
Although PayPal has a security system that usually screens out scams, Sueddeutsche Zeitung reported that the system was either entirely or largely disrupted, meaning the payments app was sending unverified direct debits to banks. Shares of the US-based payment app were 1.9% lower after the market opened at USD 68.89, compared to broadly flat indicators for the main Wall Street indexes.
Germany's Savings Banks and Giro Association, representing over 300 local savings banks and financial service providers, said in a statement that instances of unauthorised direct debits from PayPal had a significant impact on payment transactions throughout Europe, particularly in Germany. The association added that PayPal transactions for customers at Sparkasse banks were operating normally as early as Tuesday, 26 August, and stated that supervisory authorities had been informed of the incidents.
PayPal’s response
When asked to comment on the report, a PayPal spokesperson stated that a temporary service outage had impacted some transactions from banking partners and possibly their customers, but the issue has now been resolved.
Additionally, a spokesperson for the CSSF regulator in Luxembourg, where PayPal Europe is headquartered, confirmed that there are no major ongoing disruptions requiring regulatory intervention and declined to comment on PayPal specifically.
