German lenders temporarily halted direct-debit payments worth in excess of €10 billion after PayPal’s fraud-detection system malfunctioned late last week, Sueddeutsche Zeitung reported. Bayerische Landesbank, Hessische Landesbank and DZ Bank were among the institutions that blocked transfers on Monday after millions of suspicious debits entered their systems. PayPal confirmed a “temporary service interruption” that affected transactions involving several banking partners and said the underlying problem has been fixed. The company added that it is working with banks to update affected customer accounts. Germany’s Federal Financial Supervisory Authority (BaFin) said it has been notified of the incident and is coordinating with Luxembourg’s CSSF, which oversees PayPal Europe. The country’s Savings Banks and Giro Association said the disruption had a significant impact on payment traffic across Europe, though transactions at Sparkasse banks were back to normal by early Tuesday. Shares of PayPal fell about 2% in early U.S. trading as investors assessed the scope of the security breakdown and potential reputational damage.