PayPal Outages Persist, Worry Users

By Matthew Hicks  |  Posted 2004-10-13 Print this article Print

PayPal reports improvements, but five days of intermittent access raises concerns for sellers and buyers.

Sporadic outages at PayPal stretched into a fifth day on Tuesday, though the company late in the day reported that access had returned to normal for most users. Even as access appeared to be improving, the effect of the payment services troubles was rippling among sellers and buyers who had lost sales and begun questioning its reliability. PayPal, based in San Jose, Calif., and owned by eBay Inc., is the major online payment system for eBay auctions as well as smaller e-commerce sites. The intermittent outages caused problems across the service, from access to the site and account information to PayPals debit card and shipment services.
The problems began on Friday after PayPal conducted a monthly software update. They subsided on Saturday, only to resurface on Sunday and worsen through at least early Tuesday, according to PayPal users and statements from the company.
Midday on Tuesday, Web-site monitoring companies found the PayPal home page to be largely unavailable at times. During a 2-hour span, AlertSite Inc. reported that PayPal was available only 35 percent of the time. Keynote Systems Inc. also was unable to connect to the site from 10 locations nationwide. PayPal is blaming the outages on the software update, and officials did not know how many of its 50 million user accounts were affected. Spokeswoman Sara Bettencourt said while some users could not access their accounts or faced delays, others had not experienced problems. She did not know when the software glitches would be fixed but said that both eBays and PayPals technical teams were working on the issue. Is eBay a good partner for VARs? Click here to find out. For Ron Hammon, who sells cowboy hats and gear online through his company Proud Cowboy, in Hartselle, Ala., the outages have cost him sales during a weekend where he had planned on the Columbus Day holiday boosting orders. Hammon relies on PayPal for payment processing, to run shopping-cart functionality for about 2,000 items sold online and to track and ship orders. He sells about 600 items a month using the service and estimated that he lost about $1,000 in anticipated sales from the on-and-off outages. "This is not yet a catastrophe, but its heading that way if it lasts much longer," Hammon said. "If this continued for a week, it could very seriously nearly put me out of business." Next page: Resorting to old-fashioned payments.

Matthew Hicks As an online reporter for, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.

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