PayPal Debit Card Glitch Blocks Transactions, Users Say

Users are reporting that PayPal seems to be having technical difficulties with a debit card that allows users instant access to the money in their PayPal accounts.

Users report that they are unable to activate the cards or they are being denied transactions.

The problems seem to go back at least a month, based on message board postings on eBay, which owns PayPal. One user on March 5 reported debit card transactions being denied over the phone, online and in-person "for vague security reasons." Several other users have reported similar problems.

On March 20, a user whose PayPal card had been denied repeatedly wrote in a message board posting that a phone conversation with PayPal revealed that thousands of debit cards were de-activated and no longer work.

A PayPal employee named Ashley responded to the posting, saying she looked into the user's problem and that it should be resolved.

PayPal so far has not responded to a request for comment Network World submitted on Monday.

Complaints

Keith Krebs, a New Jersey resident with experience as a tech writer, said in a phone interview this week that he ordered a PayPal card two weeks ago and hasn't been able to activate the card despite placing numerous phone calls to PayPal's support line. One supervisor told Krebs that PayPal is having many problems with the cards and that they would send him a new one, he says. The inability to use the debit card made a business trip more than a little aggravating, Krebs says.

"What is unusual here is they have no way of telling until the customer calls in that there's a problem with the card," Krebs says. "When they're issuing the card, they don't know the card [cannot be activated]."

PayPal, a service that lets users make online payments directly from their bank accounts and  credit cards, has struggled to produce a reliable debit card service for years. One story in September 2005 says PayPal blamed a third-party vendor for a glitch that had debit card holders seeing duplicate withdrawals in their accounts.

PayPal's Web site says its "debit card gives you instant access to the money you receive in your PayPal account, eliminating the step of having to transfer money from your PayPal account to your bank account."