German Banks Block Over €10 Billion In Paypal Payments Amid Fraud Alerts

ORIGINALLY PUBLISHED IN DE MODE

Article Published on: 31ST AUGUST 2025 | www.demodemagazine.com

German banks have frozen PayPal transactions worth more than €10 billion ($11.7 billion) after detecting a surge in suspicious direct debits. According to Sueddeutsche Zeitung, cited by Reuters, lenders flagged millions of potentially fraudulent transactions last week, prompting them to halt payments earlier this week. Sources said the blocked amount ranges from hundreds of millions to billions of euros. PayPal later confirmed that its security system, which normally screens such activity, had been “largely disrupted,” allowing unvetted transactions to slip through.

The company said the issue, which affected “certain transactions from our banking partners and their customers,” has since been resolved. Germany’s Savings Banks and Giro Association reported a “significant impact on payment transactions,” though Sparkasse services are back to normal. Regulatory bodies, including BaFin and Luxembourg’s CSSF, have been notified, with CSSF stating there is no need for immediate intervention. Investigations into the disruption continue.