PayPal Holdings (NASDAQ:PYPL) saw its stock decline after multiple German banks blocked direct debit payments linked to the platform, citing suspicious or potentially fraudulent activity, according to Süddeutsche Zeitung.
Shares of the digital payments company fell as much as 3.4% in premarket trading following the report. Merchants using PayPal’s services are reportedly waiting for payments that have been delayed due to the banking restrictions.
A PayPal spokesperson confirmed the disruption, telling Süddeutsche Zeitung that the company experienced a “temporary service interruption” and is actively collaborating with the affected banks to update accounts and resolve the issue.
The timing of the incident is challenging for PayPal, which is striving to maintain its foothold in the competitive digital payments sector. The transaction blocks by several banks could weigh on user confidence in the platform’s reliability.
The company has not disclosed how widespread the problem is or the number of merchants and customers affected by the blocked transactions.
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