PayPal outage frustrates merchants, consumers

(AP) -- PayPal suffered periodic breakdowns that crimped Internet sales for more than four hours Monday.

The main outage occurred from 1:30 p.m. EDT through 2:30 p.m. when PayPal was unable to process any transactions worldwide, according to company spokesman Anuj Nayar.

The online payment service continued to experience scattered problems until about 6:10 p.m EDT. A bad piece of hardware caused the trouble, according to PayPal's blog.

PayPal is looking into whether merchants should be reimbursed for any lost sales during the outage, Nayar said. The payment service is owned by San Jose, Calif.-based eBay Inc., one of the Internet's main shopping centers.

PayPal and another eBay payment service, Bill Me Later, handled $16.7 billion in sales during the second quarter.

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