Just as Black Friday sales commenced across Australia, PayPal which has several hundred thousand small business accounts, suffered an outage that appeared to be interfering with merchants’ ability to process payments.

On Thursday, the company acknowledged the outage saying that it was experiencing “a system issue” affecting multiple PayPal Products including account withdrawal and express checkout.

It said its cryptocurrency services and peer-to-peer payment app, Venmo, were among services affected by the outage.

Platform outage monitor Downdetector received more than 7,000 reports from users as of 12:12 GMT.

According to the company’s service status dashboard, the incident began at 10:53 UTC.

Around two hours after initial reports of the outage surfaced, PayPal reportedly fixed the technical issue.

PayPal Australia has run into problems with regulators here in Australia. Last year, ASIC commenced proceedings against PayPal in the Federal Court alleging that its standard form contracts with small business customers contained an unfair contract term.

The controversial term was to allow PayPal to retain fees that it had erroneously charged if the small business failed to notify PayPal of the error within 60 days of the fee appearing on its account statement.

In July this year, the court agreed with ASIC and declared the clause used by PayPal Australia in its standard form contracts with small businesses to be unfair.

The ruling applied to small businesses who opened a PayPal Business Account between 21 September 2021 to 7 November 2023.

As of 30 June 2023, there were reportedly over 600,000 small businesses with PayPal Business Accounts.

PayPal agreed that the term was unfair and removed the term from its contracts on 8 November 2023.