Kenyan fintech Payd set to resume payouts after FX losses

Payd plans to switch its service back on after foreign exchange losses left it short of the money needed to settle some customer balances. Kenyan fintech Payd is preparing to restart its payment services after a foreign exchange problem disrupted some customer payouts earlier this year. The company plans to resume its app, WhatsApp chatbot, business platform and API on 18 September, according to CEO Benaiah Wepundi.

Payd stopped some payouts in May. Customers reported problems making transfers, including transfers to Nigeria, while others complained about failed or delayed transactions. The company has denied that it shut down.
The problem was not a single failed transaction or payment provider outage. It came from how Payd was managing money across different currencies.

Payd allows freelancers, contractors and businesses to receive international payments and convert them into local currencies. The company said it had about 30,000 users across Kenya, Nigeria, South Africa and Senegal as of February.

Where the money went wrong

Payd received most of its incoming payments in US dollars but had to pay customers in local currencies. The company was not tracking closely enough how much those local-currency payouts could cost when exchange rates moved. Wepundi gave a simple example. A $100 payment could be set aside when $1 was worth 10 units of a local currency. If the customer withdrew the money five days later when $1 was worth 13 units, Payd would need more local currency to make the payout.

That became harder to manage as Payd grew. Monthly payment volumes went from about $500,000 in September 2025 to more than $3 million in April and May 2026. At one point, the company supported 52 currencies before cutting that to 35. It now plans to support 13. The company's treasury system did not properly account for changes between the exchange rate used when money was set aside and the rate available when the payout was made. Wepundi acknowledged that the company did not identify the full effect of the losses early enough.

Customers saw the problem first

The payout problems became visible in May. Two customers told TechCabal they could not use Payd to transfer money to Nigeria. One was reportedly told the issue was caused by app downtime. Customers also posted complaints about delayed or failed transfers. Payd's restart will include changes for existing customers. Wepundi said users will be able to track their existing balances and choose the accounts where their settlements should be paid. The company has not disclosed the size of the customer deficit.

Payd is changing its treasury model

The company is reducing the number of currencies it supports and changing how it holds money for customer payouts. Instead of relying heavily on local currencies held in advance, Payd plans to work with local partners to source the required currency when a payout is due.

It also plans to keep a separate record of each customer's balance and reconcile that against the funds held to cover it. The changes are aimed at reducing the exposure created by exchange rate movements. Payd says its transaction fees were not the cause of the losses.

Wepundi said the company made about $1.50 for every $100 processed, while payment providers charged between 30 cents and 75 cents. That left Payd with roughly 75 cents to $1.20 before costs such as staff, technology and compliance. The problem was the gap between the money coming into Payd in dollars and what it eventually needed to pay customers in local currencies.

Funding has also become tighter

Payd's problems have come during a difficult period for its fundraising plans. The company had been raising a pre-seed round but did not complete it after fundraising slowed around March and April. Wepundi said Payd secured about $110,000 towards the round across 2025 and 2026. He said the company has raised $123,000 from investors, including $48,000 from Nairobi Business Angels Network in 2025 and $50,000 from Kaleo Ventures in the first quarter of 2026.

It has also received about $43,000 in grants and other support, bringing its total funding and non-equity support to $166,000. Plans to use some of the funding for licensing work in the US, Canada and Rwanda have been paused. Payd has instead been looking at strategic funding, partnerships and a possible merger or acquisition.

A smaller Payd is coming back

The company has reduced its team from eight people earlier this year to six. The current team includes four full-time co-founders and two part time engineers. For now, Payd plans to fund its operations from revenue and use what remains towards the customer shortfall over the next six months. Wepundi did not disclose the size of that shortfall. The company has also changed its approach to currencies, reduced the number it supports and is looking for local funding sources when payouts are due.

Payd will continue using licensed payment providers and virtual asset service providers for services that require regulatory authorisation. The restart gives Payd a chance to get the platform working again. But the immediate issue is more basic than growth targets or expansion plans: the company has to make sure the money coming in is enough to cover the money going out.