A glitch with online payment company PayPal has hit a number of New Zealand small businesses in the pocket.

Criticism of the global payment giant has grown after a number of business owners set up a Facebook page to complain they had received very little communication or explanation from PayPal.

Hamilton-based photo retoucher Allison Crene said she was astonished by the lack of recognition from the company.

According to one post from PayPal, the issue has now been resolved and consumers can expect to receive funds "with 24 hours or a week" - depending on the bank. However, many remain cautious and are talking compensation.


"We've been waiting for seven days, can they reduce our fees for a month? They need to go above and beyond if they want to get our trust back because we are now discussing other ways to get paid in New Zealand," Crene said.

"A lot of people don't trust PayPal anymore. For me its not about screw-ups, technical screw-ups happen all the time, you can't get angry - it's just the society we live in. But it's the way the company has reacted and I don't think I've ever seen such a poor reaction from a massive company to its clients. We just don't feel like they care."

Several other members of the Facebook group have voiced similar concerns on the company's reaction.

In a statement to the Herald a PayPal Australia spokesperson said the company was working hard to fix the error.

"PayPal is aware of an error that has resulted in some of our New Zealand customers experiencing an issue with transactions being moved to their bank account from their PayPal balance. We are aware of the situation and our team is working hard to fix it as soon as possible. We sincerely apologise for any inconvenience caused."

Crene described the situation as "confusing" and "ridiculous".

"It just makes us feel like we, as New Zealanders, they don't really give a damn about us because obviously all around the world America is probably their biggest contractor. But still, there's a lot of money going through New Zealand accounts and we just feel like they are not taking us seriously."

The number of small to medium businesses first reported to be affected was close to 20. However, one Facebook user said others in a number of her business groups suggest the number is closer to 70.


PayPal administrators had been contacting those affected through email or Facebook comments, Crene said.

A number of users are still waiting to receive money from PayPal. Photo / Getty Images
A number of users are still waiting to receive money from PayPal. Photo / Getty Images

"Basically they have said we recognise there is an issue for New Zealand withdrawal payments, but it took a lot to get there and now they said they have it sorted and will get the funds sorted within 24 hours or by the end of the week."

• Online business owner Make Wine said the glitch had put him in serious financial hardship and forced him to suspend his PayPal account from his website.

"Its not so much that a mistake has been made, its the lack of response and responsibility and communication from PayPal that I find most disturbing," he said. "I doubt I will continue to use PayPal after this."

Its not so much that a mistake has been made, its the lack of response and responsibility and communication from PayPal that I find most disturbing.

• Local fundraiser Lou Hopkins, who uses PayPal to crowdfund money for 'pay it forward' initiatives and animal care, said the glitch had put her $900 out of pocket and is worried about what will happen to donated funds once the fundraiser closes on Sunday.

Hopkins said she had also contacted PayPal, but the response wasn't adequate.

"It's like you are talking to a robot basically."

Yesterday PayPal acknowledged the issue of money not being transferred in to bank accounts, apologising for the glitch via Facebook comments.

"We do apologise for the obvious frustration this is causing. We have recently been made aware of a processing issue with some withdrawals, however it is being looked into and we're hopeful that a resolution will be forthcoming soon," the company said in a post.

• Muscle Fuel owner Hamish Coulter yesterday told the Herald the glitch had forced him to take an emergency loan after he did not receive funds of $25,000.

In PayPal's Community Help Forum the company advised retailers to hold off from sending parcels or product to consumers until funds had arrived.

"Until the payments shows as completed in your account activity log we would advise you not to send out the parcel. We expect this issue to be resolved soon therefore this shouldn't cause any major delay to your parcel send."