BERLIN (Reuters) -German banks blocked PayPal payments worth more than 10 billion euros ($11.7 billion) due to concerns about fraud, the Sueddeutsche Zeitung newspaper reported on Wednesday.

The payments were halted on Monday after lenders flagged millions of suspicious direct debits from PayPal that appeared last week, the newspaper said, without specifying its sources.

"PayPal had a temporary service interruption that affected certain transactions of our banking partners and possibly their customers," the Sueddeutsche Zeitung quoted a PayPal spokesperson as saying.

Representatives of PayPal in both Germany and the United States did not immediately respond to Reuters requests for comment.

Shares of the U.S.-based payment app were 2.5% lower in premarket trading, versus broadly flat indicators for the main Wall Street indexes.

PayPal said on its website that a temporary service interruption caused delays in transactions for a small number of accounts over the weekend. "The issue has now been resolved," the statement said in German.

The company has a security system that usually filters out scams trying to extract money from banks.

But the Sueddeutsche Zeitung said this system was either completely or largely disrupted late last week, meaning the payments app was sending unvetted direct debits to banks.

Germany's Savings Banks and Giro Association, representing more than 300 local savings banks and financial service providers, said in a statement on Wednesday that instances of unauthorised direct debits from PayPal had a "significant impact on payment transactions" throughout Europe, and particularly in Germany.

The association added that PayPal transactions for Sparkasse customers were operating as normal early on Tuesday and said supervisory authorities had been informed of the incidents.

The BaFin regulator confirmed it had been informed but did not provide any further details.

The Commission de Surveillance du Secteur Financier (CSSF), the regulator in Luxembourg, where PayPal Europe has its headquarters, declined to comment on PayPal specifically.

A spokesperson said there were currently no major ongoing disruptions which required the regulator to intervene.

($1 = 0.8542 euros)