PayPal’s Instant Payment Notification (IPN) system which online merchants use to integrate payment processing to their ecommerce sites had intermittant problems over the weekend.
This bug led to customers having payments taken from their accounts, but no notifications were being passed to the merchant who naturally were unaware and didn’t ship their order.
A TameBay reader reports about 14% of his transactions failed and have had to be reconciled manually. One of the biggest problems for merchants was the intermittant failure which didn’t immediately trigger alarms – If all payments had been affected it would have served as a warning there was a problem and sellers could have reacted more quickly to ensure customers orders were shipped.
According to the PayPal blog the issue has been resolved, and PayPal will be working with merchants to update any outstanding transactions.