Network hardware failure blamed for PayPal collapse

Merchants express frustration about impact on sales and on customer satisfaction

A network hardware failure knocked PayPal offline for all of its users globally on Friday, and the recovery and failover systems didn't spring into action as quickly as they were supposed to.

That outage, which hit shortly after 11 a.m. U.S. Eastern Time, was solved at around 12:30 p.m., but PayPal experienced another "service interruption" at 2:30 p.m. that dragged on for almost another hour.

"We are investigating ways to ensure that this doesn't happen again," wrote PayPal CTO Scott Guilfoyle in a blog posting.

In Guilfoyle's posting and previous ones about the outage, various merchants expressed frustration with the technical problems and the impact they had on sales and customer satisfaction.

PayPal has more than 87 million active accounts in 190 markets and 24 currencies worldwide.

In the third quarter, PayPal's revenue shot up 22 per cent and accounted for 37 per cent of the revenue of its parent company eBay.

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