European banks have seen widespread unauthorized direct debits from PayPal accounts, the German Savings Banks Association (DSGV) says.
The German newspaper Sueddeutsche Zeitung (SZ) states that payments worth approximately 10 billion euros (£8.6bn) have been blocked after PayPal's fraud-checking system failed to operate correctly.
Payments were paused on Monday when various lenders reported millions of suspicious direct debits linked to the payment firm.
The DSGV confirmed to the BBC that there have indeed been incidents involving unauthorized direct debits initiated by PayPal against various credit institutions.
The BBC has approached PayPal for comment.
A spokesperson for PayPal told Reuters that certain transactions from our banking partners and potentially their customers were affected by a temporary service interruption.
We quickly identified the cause and are working closely with our banking partners to ensure that all accounts have been updated, they added.
The DSGV noted that PayPal had recognized the disruptions and assured stakeholders that the issue had been resolved.
Payment transactions to and from PayPal have reportedly returned to normal operation, although the disruptions had widespread effects across Europe, particularly in Germany.
Regulatory authorities have also been informed about the incidents with PayPal.
PayPal aims to filter out scams effectively before they reach banks through a security system designed to combat fake direct debits initiated by fraudsters.
According to SZ, however, PayPal's filter system malfunctioned on Monday, leading to unchecked direct debits being processed alongside legitimate ones.
Following the report, shares in the payment firm fell by 1.9% on Wednesday.
