PayPal began getting back to normal Tuesday afternoon and improved significantly on Wednesday after a 4-day intermittent problem left many users unable to access their accounts.
PayPal spokesperson Amanda Pires said Wednesday morning, "Things are definitely much better and transactions are pretty much flowing, and things are going through for our users. People still may be experiencing some slowness, and that has to do with catch-up for some volume, but we think today should straighten all that out."
Users have been speculating about the source of the problem, wondering if it was an attempt by hackers to bring down or gain access to the site, and pointing to a slew of security patches released by Microsoft on Monday.
Pires said the problem was due to coding changes the company made late last week. She ruled out the possibility of a hack or DOS attack, saying of the outage, "We know for a fact it was an internal issue due to a code push."
Some people began experiencing intermittent problems Friday, and by Monday, site accessibility problems were widespread, leaving many to believe the site was experiencing an outage. The problems affected eBay users as well as some small merchants.
Jason Archambault of Fast-Pack.com, a site that sells shipping supplies on eBay and on its own site, noticed a dramatic drop in sales over the weekend. He uses PayPal's shopping cart to power his ecommerce site and is now reevaluating his reliance on PayPal. "We have learned the hard way, if PayPal goes down, our Web site is useless," said Archambault. "We cannot allow this to happen again."
The problems mainly affected online auctions and small ecommerce sites, but some users of PayPal's debit card could not pay for offline purchases either. One cardholder said she was embarrassed when her card gave a store clerk an "insufficient funds" message and she was unable to pay for groceries.
Eric Jackson, author of "The PayPal Wars" and former Director of Marketing at PayPal, said he thinks PayPal will have to communicate with its customers about what happened. "Making sure the customers feel PayPal understands the problem, has fully corrected it, and done so in a way that won't allow it to happen again are the most important things."
Wednesday evening, PayPal's Pires reported that the site was fine. When asked if PayPal had to reverse the changes made to the code last week, she said, "We didn't roll back the changes we made Friday. We did some re-coding and fixed some other issues."
Pires said PayPal was not taking the problem lightly and are evaluating ways to make sure it doesn't happen again. "We are very apologetic and know it has disrupted people's businesses, and we are regretful for that."
eBay spokesperson Hani Durzy said he doesn't expect the PayPal problem to have a material financial impact on its business. But, he said, "We recognize that lots of people were affected and transactions were disrupted. It's impossible to quantify, but most of those transactions have been settled or will be settled now."
A post on eBay's System Status Announcement Board on Wednesday asked members to "be patient with trading partners over the next several days. As normal trading activities resume, there may be delays as PayPal users process backlogged payments and shipments."
