System Upgrade Causes Glitch In eBay's PayPal

Sellers experienced problems shipping products to buyers and buyers experienced difficulties paying sellers in the wake of the software code enhancements on the PayPal servers that were done Oct. 8. Furthermore, PayPal said the glitches caused some PayPal members to have troubles with their debit cards. The company, which is owned by eBay, insisted that account data and personal information were not compromised by the glitches.

PayPal Profile >> Online payment service founded in 1998
>> Based in San Jose, Calif.
>> Acquired by eBay for $1.5 billion in October 2002
>> 50 million members

Pete Busam, vice president of Decisive Business Systems, a Pennsauken, N.J.-based solution provider who uses eBay, said he attempted to use the PayPal service and even though he had $800 in his account, the service said that those funds were not available. Busam was able to complete his PayPal transaction, but he noted that it took him three days of intermittently attempting to use the service.

Busam said the PayPal snafu is an example of the technical problems that can disrupt business in the wake of a system upgrade. "When you commit to a project and move forward with it and it breaks the system, the question is how many days are you going to let it stay broken before you roll back to something that works?" said Busam.

As of last Wednesday, PayPal claimed most of the issues had been resolved, noting that users should be able to log in and access all site features normally.

Sponsored post

The servers impacted were at PayPal's headquarters in San Jose, Calif. The software upgrade was done by PayPal's own technical team rather than a third-party integrator or service provider. A technical team that included PayPal and eBay personnel worked around the clock attempting to fix the problems.

Justin Nolte, CEO of Xotic PC, a Lincoln, Neb.-based custom-system builder that sells systems on eBay, said he was not impacted by the PayPal troubles because he stopped using it for payments several years ago after having trouble getting access to $15,000 from the online payment site. "We now take credit cards direct and process them through our own computer," he said.