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PayPal Snoozes While Users Lose in Technical Nightmare

After a three-hour outage on Sunday afternoon that left PayPal users unable to log in to the site, technical problems on PayPal continued. Within hours after the login problem subsided, reports began surfacing from users who said their payments were evaporating into thin air.

Reports came in to Twitter, Ecommerce EKG, and industry boards, such as this tweet last evening: “Mhm it’s great that @PayPal has “issues” preventing me from accepting a payment, oh and no timeframe for when it will be resolved… :/”

A user explained the issue on IsItDownRightNow, writing, “Same issue as other – error on account summary, money debited from my balance, money not received by the merchant and no transaction showing on my account.”

Computing.co.uk wrote on Monday, “Electronic payments platform PayPal has been hit by a major systems failure worldwide. The fault rendered all new transactions made since the fault occurred invisible to both the sender and the recipient.”

The publication noted the seriousness of the problem, saying neither buyers nor retailers could tell if payments had been made or received. And it wasn’t just purchases – one user tweeted on Monday morning, “@PayPal I really hope you give me my back the rent money I sent that disappears wth out a trace. Thousands of dollars just magically gone.”

PayPal compounded the problem for users by failing to announce or acknowledge the problem, as demonstrated by a user who tweeted on Monday afternoon, “@paypal I sent someone money. It didn’t show up then I paid again. Now it deducted both payments even though one was accidental and norecord.”

The user also noted he had been on hold with PayPal for an hour and 20 minutes, and Twitter was full of posts on Monday from users complaining of long hold times.

PayPal did not respond with answers to our questions about the technical issues on Sunday and Monday. There’s no sign of any acknowledgement of the problem on PayPal or on its social media accounts. However, digging around on the PayPal forums, we found a post by PayPal Frank published at 1:40 pm EST on Monday in response to a thread that was started Sunday evening at 10:21 pm.

Hi everyone,
Our engineers are aware of an issue right now where payments are not immediately appearing in the account activity for both senders and recipients. We apologize for any inconvenience this may cause and our engineers are working to fix this as soon as possible.

This issue appears to be causing a delay in when the payments appear. The transaction is initiated, it’s just not appearing on the website for up to 4-5 hours in some cases (the time appears to be random).

I will update this post when we have more information and to let everyone know when the fix has been implemented.

Thanks for your patience and understanding.

PayPal responded to our inquiries at 7:03 pm Monday evening with the following statement:

“Some PayPal customers experienced a minor disruption of service yesterday, which lasted less than an hour. We regret any inconvenience this may have caused our customers, but are pleased to report the issue was fully resolved.”

The spokesperson seemed unaware of the earlier post on its own forums and a tweet from its Twitter account an hour an a half earlier- at 5:27 pm, the @AskPayPal Twitter account finally tweeted an announcement about the ongoing problems: “We are aware of delays w/ payments not showing for 4-5 hours. Teams are working to fix asap. Apologies for any inconvenience this may cause.”

Responded one user: “@AskPayPal Inconvenience? I have actually lost money due to this, do you realise that?”

An eBay seller then tweeted, “@AskPayPal I reported my eBay buyer as fraud breh.”

Sellers have turned to Ecommerce EKG to report multiple issues with PayPal since Sunday. One said the technical problems demonstrated the problem with eBay allowing only one payment service on its site, writing, “PayPal is messing up all transactions, the only thing is allowing is to open cases, very convenient of course so they can hold the money for longer. eBay’s ONLY payment system once again showing the world they are useless, they create the issues, sellers pay for it. APOLOGIES Are Not Enough! eBay needs another 2 or 3 payment systems in place.”

Later in the evening in response to our follow-up, the PayPal spokesperson emailed back and said he had been able to confirm the two issues were not related but did not share additional information.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.