European banks have seen widespread unauthorised direct debits from PayPal accounts, the German Savings Banks Association (DSGV) says.
The German newspaper Sueddeutsche Zeitung (SZ) says payments worth in the region of 10 billion euros (£8.6bn) have had to be blocked, after PayPal's fraud-checking system failed.
It said payments were paused on Monday when lenders reported millions of suspicious direct debits from the payment firm.
The DSGV confirmed to the BBC there had been "incidents involving unauthorized direct debits initiated by PayPal against various credit institutions".
The BBC has approached PayPal for comment.
