A failure of security systems at PayPal is causing concern for German banks

PayPal security and user experiences

• Many commenters report long‑standing problems: random account locks/closures, frozen funds, opaque decisions, and weak customer support with no meaningful appeal.
• Several say they abandoned PayPal or keep only minimal balances, using it only when merchants force it.
• There are anecdotes of unexplained negative balances, seized money, and difficulty deleting accounts or data.
• Some users feel PayPal leaks or sells data, citing unique email addresses that later receive spam and merchants apparently being updated with new PayPal emails.
• Others stress that fraud prevention is a “Red Queen” game; huge volumes of fraud attempts are blocked but not visible to users, and a non‑zero false positive rate is inevitable. The real failure is the lack of effective appeal and staffing.

Current incident: German banks blocking PayPal debits

• Reports describe widespread unauthorized SEPA direct debits via PayPal, estimated at around €10B, after PayPal’s fraud checks allegedly failed.
• German banks responded by blocking incoming PayPal direct debits to protect customers and themselves, as SEPA gives consumers strong, essentially automatic chargeback rights.
• Similar unauthorized withdrawals were reported at a Dutch bank and withdrawal issues were mentioned in the UK. Detailed root cause remains unclear.

Why PayPal is still big in Germany/Europe

• In Germany, PayPal is said to handle roughly 30% of online purchases. Historically it offered instant payments when credit cards were rare and bank transfers were slow.
• For many online merchants, especially internationally, PayPal remains the most convenient or only broadly supported option. Buyer protection is seen as real added value.

European alternatives and modernization

• Numerous national systems (iDEAL, Giropay/Paydirekt, EPS, Twint, MobilePay, Blik, etc.) already offer instant, bank‑linked payments; users in those countries often barely need PayPal domestically.
• Wero aims to unify and eventually replace several of these schemes on top of SEPA Instant. Some see it as promising and already integrated in banking apps; others view it as slow, bureaucratic, and not yet widely supported.
• German banks are criticized for resisting instant transfers and digital innovation until legally forced, partly to preserve float revenue; others point to genuine settlement and liquidity issues.