PayPal Goes Down For 4.5 Hours, What Does This Mean For Business?

On August 3, PayPal had a major outage that brought their service offline for an extended period. The systems were down globally for an hour, and it took an additional three-and-a-half hours to bring everything back up to full capacity. What does a 4.5-hour outage mean for PayPal and internet commerce as a whole?

Fuzzy MathUptime monitoring service Pingdom suggests that the outage cost businesses between $7 million and $32 million USD, as PayPal claims that they process $2,000 in payments every second.

I opine differently. If I were planning on purchasing a book from Amazon, and their site was inaccessible for a few hours, would I decide to not ever buy the book? No. I’d mutter something about inconvenient server outages and come back later, when the site is back up. Amazon wouldn’t lose my $35, they would just receive it the day after. PayPal merchants are no different.

Businesses have an increasing tendency to claim that they would have made $x in some case, if not for some circumstance outside their control, when in reality they have no way of knowing. The RIAA is a notorious example of this, where they insist that their declining profits are directly linked to piracy. How can they say that everyone who illegally downloaded an album would have bought it otherwise? They can’t.

How much money did PayPal’s downtime cost businesses? There’s no way of knowing, but I highly doubt it’s $7 million.