PayPal’s payment interface suffered a blow today when their API went offline. This doesn’t mean that PayPal’s website went down—that’s been working properly this entire time—but instead people haven’t been able to make or receive payments for a while. Some people have even reported being unable to withdraw money. However, it is starting to recover already, which is a good sign.

Other reports incoming mention that PayPal debit cards have been getting declined at point-of-sale so the problem might be in their financial transaction system, rather than the Internet communications side (i.e. the side we’re all used to seeing suffer when networks and web pages go down.)

The Next Web has a little bit more analysis on the ongoing issue,

The issue, as one Twitter user points out, is that PayPal’s downtime reflects badly on its customers rather than the provider itself. When PayPal users aren’t able to complete transactions it causes issues for those trying to buy as well as those trying to sell. With a lack of viable alternatives for many uses, PayPal continues to have a strong hold on the Internet transactions market.

Truer words never spoken, PayPal is a powerful player in the Internet finance community, an economic backbone in fact. People attempting to make payments with it may realize that PayPal is acting up, but they’re initially going to connect the failure with those they’re attempting to transact with.

It will do a lot of good if, after this event, PayPal does a lot of damage control to make things look better for their customers, because otherwise they’re going to lose a lot of credibility in the market.

Latest from the PayPal blog:

Anuj from the PayPal comms team here. I wanted to let everyone know that we’re experiencing an issue on PayPal.com. It started at 8am PT today and means that almost all our members are having difficulty logging into their accounts and sending or receiving money from PayPal. We are working to get this fixed and I’ll update this blog post as soon as I have more information.

We’ll see how this shakes itself out.