HSBC Bermuda said today that security controls were the reason that some recent PayPal transactions were not accepted.

The bank acknowledged recent inquiries regarding declined transactions involving the use of the online payment system by local residents and merchants.

The bank apologised for the disruption of “those involving certain types of fund transfers, electronic wallets or third-party payment services, for example PayPal”.

The financial institution said that it was “due to enhanced security controls we were required to put in place, which are designed to protect our customers.”

A statement from the bank today said: “As a result, some transactions of this nature may be declined. In many cases, customers can still complete their payment by paying the merchant directly, rather than using a third-party service. We recognise this will cause inconvenience and apologise for any disruption.

“We are working to implement a longer-term solution that will enable this transaction type whilst maintaining appropriate safeguards.”

The statement did not outline the specific types of defects in the transactions that would have caused problems.

Customers claimed last month that the bank was withdrawing their support of the use of PayPal.

They complained a lack of transparency by the bank.

An online commenter in response to the news article wrote this concern: “No accountability to its customers or even the courtesy of a press release from management informing their customers of any changes... they simply don't care.”

Another sought help from eBay, assuming the American e-commerce company was the reason the purchase they sought did not go through.

But customers were especially concerned at what they felt was a lack of transparency, questioning the bank’s lack of advanced communications.

One complained: “I’ve just had an automatic subscription declined on PayPal using my HSBC card. The decision not to allow HSBC credit card transactions on PayPal should have been communicated to all customers. What’s the reasoning behind the decision?”

Others complained that HSBC was no longer working with Wise and Revolut, other companies providing international transfers.

The bank said: “Customers with specific concerns can contact their relationship manager or the HSBC Bermuda contact centre on 299-5959.”