PayPal Outage During Cyber Monday May Cost Merchants Millions

December 1, 2015         By: Asif Imtiaz

Yesterday, PayPal users complained that they were having difficulty accessing the payment giant’s website. Soon after, Ecommerce EKG and DownDetector started receiving huge amounts of reports regarding the server issues.

DownDetector reported that PayPal servers started having issues around 8:36 AM EST and recorded around 600 issues. Most users said they were having trouble logging in to their PayPal account, these users accounted for around 38 percent of the reports. Another 36 percent of the users complained about having trouble sending payments during the outage. Furthermore, 24 percent of the reports said they are having issues accessing the website altogether.

The last time PayPal users had issues using the service was back in October 4, when PayPal servers went down for three hours. According to Forbes, the last PayPal outage may have cost merchants millions of dollars’ worth of sales. PayPal blamed a power failure in its data center for the short service interruption in October.

This time around, the problem would be more severe for merchants because it happened during the Cyber Monday sales. Furthermore, PayPal users reported issues with the servers throughout the weekend and during Black Friday.

Since sales during Black Friday and Cyber Monday weekend happens to the biggest sales event in the year, even a small downtime can hurt merchant’s overall annual sales. This is especially true for eBay sellers who are completely dependent on PayPal for receiving payments. In addition, PayPal sales accounts for the majority of the sales for a large number of small businesses around the United States who were expecting a lot of orders during the Cyber Monday sales.

PayPal has around 10 million merchants worldwide who rely on its services for accepting payments. The immense popularity of PayPal has put the company on the forefront of global commerce and these frequent service outages can end up impacting the economy in the national level.