Estimates suggest that over ten billion euros may be frozen due to banking restrictions, impacting online retail and supermarket transactions.

Even after the resolution, some transactions remain unsuccessful, and PayPal indicates the problem might still persist partially, with some accounts showing negative balances.

Affected merchants are facing longer waits for their funds while banks and PayPal work towards a full resolution.

Germany's financial regulator BaFin confirmed it was informed of the incident but provided no further details, while Luxembourg's CSSF reported no major disruptions at present.

A security system failure at PayPal led to the freezing of over ten billion euros in transactions across Europe, especially impacting Germany, with banks halting fraudulent direct debits worth billions.

PayPal confirmed that the issues have been resolved as of Tuesday morning, but the company continues to monitor the situation, and some users still experience problems such as automatic reattempts to withdraw blocked funds.

Consumer advocates advise users to monitor their accounts for unauthorized transactions amid ongoing uncertainty about the incident's connection to recent platform updates.

A backlog of manual processing is expected to prolong the resolution of affected transactions over the coming days.

Despite PayPal's assurances, some users continue to face issues, including unexpected fees and incorrect alerts, which damage user trust.

Small and medium-sized businesses are particularly affected, with many awaiting payments for shipped goods, risking delays in deliveries.

Some users have encountered additional problems such as incorrect alerts for insufficient funds, further eroding confidence in the platform.

The incident underscores the fragility of fintech infrastructure and highlights the need for transparency and clear communication to maintain user confidence.

Following the incident, PayPal's shares fell nearly 2%, trading at $68.89, with premarket trading showing a decline of over 3%, reflecting investor concern.