PayPal is working with German banks to resolve outstanding issues that disrupted online payments for millions of consumers last week.
The Sueddeutsche Zeitung newspaper reported that the country's banking sector had halted €10 billion worth of payments on Monday due to concerns that PayPal's security system had stopped vetting them for potential fraud.
The event has raised alarm over the reliance by consumers on the US company for online payment transactions, giving a boost to home-grown alternatives such as the European Payments Initiative's Wero wallet.
German banks in May scrapped their own domestic PayPal competitor Giropay/Paydirekt and instead throw their weight behind the continent-wide EPI startup.
In an e-mailed statement to Reuters, PayPal said that the disruption had been resolved.
"We apologise for the inconvenience caused by the current events," PayPal told the wire. "Safety remains our top priority. We are working closely with our banking partners to resolve any discrepancies on customers' accounts. All legitimate merchant transactions will be fully remunerated."