German Banks Freeze €10 Billion PayPal Transactions Over Fraud

German banks froze over €10 billion ($11.7 billion) in PayPal transactions after a failure in PayPal's fraud-filtering system allowed millions of suspicious direct debit requests to be sent unvetted. This disruption significantly impacted payment transactions across Europe, particularly in Germany, affecting private customers, merchants, and banks. PayPal acknowledged the temporary service interruption, stating that it quickly identified the cause and worked with banking partners to resolve the issue, with transactions now returning to normal. The German Savings Banks and Giro Association confirmed the incident and informed regulators, while German and Luxembourg financial authorities were notified but did not provide further intervention details. There are concerns about a possible PayPal hack due to leaked login credentials on the dark web, but PayPal denied any system breach, attributing the data leak to older malware on user devices. The incident has put renewed pressure on PayPal to ensure the security and reliability of its platform.