PayPal hit by 'technical issues' over security checks
- 28 September 2012
- From the section Business
Payments business PayPal has been hit by "technical issues" in the UK that have led to a string of transactions being sent for security checks.
PayPal is primarily used by traders on auction site eBay to make and receive secure payments during sales.
Changes to the system were planned to speed up the process when customers transfer money from their PayPal account to their normal bank account.
But the volume of transactions led to a glitch with security checks.
A host of transfers have been held for security checks, rather than the funds being transferred quickly to customers' bank accounts.
"We have recently experienced technical issues that have resulted in more transactions than usual being reviewed," said a PayPal spokesman.
"Although most withdrawals are not subject to review, a minority of customers have been told it may take up to 24 hours for us to review the transaction.
"We expect to solve the technical issue by the end of the week."
PayPal, like other payment providers, has a regulatory obligation to make a certain number of security checks.
It had not planned to change the number that were being reviewed when the new speedier withdrawal system came into force, but it had become "somewhat overloaded", the spokesman said.
Under the changes, customers should have been able to transfer funds to their regular bank account from their PayPal account within a few hours. Previously this had taken three working days.
PayPal, which is owned by eBay, had 113.2 million active accounts at the end of the second quarter of the year, up 13% from a year ago.
In July, eBay reported net income of $692m (£442m) for the three months to the end of June, up from the $283m the company made in the same period a year earlier.
Revenue for the business rose by 23% to $3.4bn, slightly above analysts' expectations of $3.36bn.