PayPal suffers global outage

 

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By Reuters

Posted on 4 Aug 2009 at 08:34

EBay's online payments service, PayPal, was shut down worldwide for about an hour on Monday after the retailer encountered "internal problems".

The outage began at 6:30pm GMT and affected all users for about an hour. Scattered problems continued to hit users until 2:30am.

"I haven't heard the absolute clear definition of what happened from the engineering team yet," says eBay spokesman Anuj Nayar said, though he denied reports the service had been attacked. "I can confirm that it was an internal problem, not an external problem."

The company says it is considering reimbursing merchants for lost sales during the outage. However, even if it doesn't, analysts claim the outage is unlikely to affect consumer confidence in the service.

"An occasional server shutdown happens to a lot of companies. Obviously you don't want to have it happen more than a couple of times a year or you do start to have brand or reputation concerns," notes Kaufman Bros analyst Aaron Kessler.

"But we've seen issues with Google, Netflix and Amazon.com over the last couple of years, so I don't think an isolated incident is a huge deal for these companies."

PayPal, which accounts for roughly a third of eBay's sales, has about 75 million active users and is the world's largest internet-based payment system. It handles $2,000 a second in online transactions, according to Nayar.