PayPal (PYPL) stock was trading lower on Wednesday morning. The decline came after several German banks blocked more than €10 billion ($11.7 billion) in transactions linked to the payments platform due to a major security issue, according to a German newspaper, Suddeutsche Zeitung.
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The German lenders identified several suspicious direct debit requests from PayPal late last week. The company’s usual fraud-filtering system was reportedly disrupted, allowing unchecked transactions to reach banks.
In response, banks temporarily paused PYPL payments starting Monday, citing a “significant impact on payment transactions” across Europe, particularly in Germany. The Savings Banks and Giro Association, which represents over 300 financial institutions, confirmed the issue and said regulators had been notified.
PayPal acknowledged a “temporary service interruption” and said it was working with banking partners to resolve the issue.
PYPL’s Past Security Lapses
Separately, there has been a lot of buzz about a possible PayPal hack. A hacker recently claimed to be selling nearly 16 million PayPal login credentials on a dark web forum, raising concerns about a possible breach.
The leaked data reportedly includes email addresses and plaintext passwords, along with URLs tied to PayPal login pages.
However, PYPL has denied any system breach, stating that the data likely came from older infostealer malware that stole credentials from infected user devices, not from PayPal’s own infrastructure.
This is not the first time PayPal has faced scrutiny over user data. In 2022, the company suffered a security lapse that exposed 35,000 accounts and resulted in a $2 million regulatory fine.
Between the halted transactions in Europe and concerns over leaked credentials, PayPal is under fresh pressure to prove its platform is safe and secure.
Is PayPal a Buy, Sell, or Hold?
Turning to Wall Street, PYPL stock has a Moderate Buy consensus rating based on 11 Buys, 14 Holds, and three Sells assigned in the last three months. At $79.41, the average PayPal stock price target implies an 11.28% upside potential.
