PayPal suffers from e-commerce outage
PayPal suffered a global outage and slow performance Monday, but eBay said its online payment system is mostly back in working order.
"About an hour ago, PayPal started experiencing site issues that affected the ability to send and receive money. We have all hands on deck to get this fixed," said PayPal spokesman Anuj Nayar in a blog post about noon PDT. "We're really sorry for the inconvenience."
An update at 12:40 p.m. said the site was working again for most users.
Nayar said in an interview the outage was global and the worst of the outage lasted about an hour total, though the site wasn't fully recovered just before 2 p.m. PDT.
$2,000 per second in transactions
The outage could be costly for those who rely on PayPal to handle e-commerce transactions. PayPal says about $2,000 in payments per second flows through the system, meaning that a one-hour outage would cut out about $7.2 million in commerce.
Nayar declined to comment immediately about whether sellers would be compensated in any way or how eBay handled such decisions in the past.
As a key driver of growth for eBay, PayPal is becoming more important at the online commerce and auction site.
"PayPal is a business that will be bigger than eBay," eBay Chief Executive John Donahoe said in July. And through a developer release in July of a new PayPal payment system, eBay wants to refashion the service to enable a new generation of online commerce.
PayPal's developer site said the outage hit not just its Web page, but also through PayPal's application programming interface (API), which lets applications use the service without having to go through the Web site. It first noted the problem at 10:41 a.m. PDT.
Updated with more details at 2:04 p.m. PDT.
Stephen Shankland writes about a wide range of technology and products, but has a particular focus on browsers and digital photography. He joined CNET News in 1998 and since then also has covered Google, Yahoo, servers, supercomputing, Linux and open-source software, and science. E-mail Stephen, or follow him on Twitter at http://www.twitter.com/stshank. 
The latest update is that API transactions are taking 10 seconds, the effect of which is often a timeout. Losing lots of money today...
"PayPal is a business that will be bigger than eBay," eBay Chief Executive John Donahoe said in July. And through a developer release in July of a new PayPal payment system, eBay wants to refashion the service to enable a new generation of online commerce."
What is this nonsense?
?Noise? Donahoe and some market analysts seem to believe that PayPal?s manning of the pumps will keep the good ship ?eBay? afloat. I certainly would not put my money on the ?clunky? PayPal for the long term. Assuming that the parties don?t have some agreement to not compete, I have no doubt that eventually those other well known ?loan sharks?, the major credit card companies, will get off their butts and introduce a similar universal card/terminal-less on-line payments system that the participating banks can incorporate into their internet banking systems?and they, at least, will do it properly?and that, my friends, will undoubtedly be the end of PayPal outside of the Donahoe-dwarfed eBay marketplace ...
I recall that Donahoe has been quoted somewhere as saying that the door is slightly ajar for a potential spinoff of his company?s online payments unit. If this is correct it will be the first logical thought that this guy has ever had; he otherwise clearly has no idea of what he is doing at eBay. If that MBA taught him anything then he should be using whatever skills he does possess to negotiate with the banks to take PayPal and integrate it into their online payments system?in exchange for an appropriate interest in the consolidated business, of course. Because, the more successful PayPal is, the more likely it is that the banks will finally get off their butts and introduce a like system; if and when that happens the banks will do the job properly and will exterminate PayPal for being the ?irritating insect? that it is.
- by AdelheidBernstein August 4, 2009 4:31 PM PDT
- I know the outage affected our site, which uses the PayPal shopping cart, for roughly 3.75 hours. Fortunately, we were able to quickly switch to our old backup shopping cart, so we didn't lose out on sales, but we had to settle on a slightly larger processing fee from that vendor. So, it was a mild nuisance, but could have resulted in some lost sales had our webmaster not been paying attention.
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