According to PayPal, problem began around 1330 EDT, and affected all PayPal customers for about an hour. By 1830, service was restored to all customers, PayPal said.
It went on to say,
"We’re now working to fully understand how we can prevent such a service interruption from ever happening again. We’re also reaching out to merchants to discuss the impact this interruption had on their businesses."
News reports say that PayPal transacts about $2,000 in commerce per second, so an hour outage is not inexpensive.
In 2004, PayPal had a five day outage due to a software update that misfired.