Kenyan fintech Payd plans service restart after FX losses disrupt payouts

Kenyan payments startup Payd plans to resume its payment services on Friday, September 18, after foreign-exchange losses disrupted some customer payouts.

The company paused some payouts around May, while customers reported failed or delayed transfers, including payments to Nigeria. Payd also attributed at least one reported disruption to downtime on its app.

Founder Benaiah Wepundi said the planned restart will cover Payd’s app, WhatsApp chatbot, business platform and API. Before services resume, users will be able to monitor existing balances and select the accounts where settlements should be paid.

FX losses exposed treasury weaknesses

Wepundi said Payd’s losses resulted from inadequate tracking of local-currency obligations and exchange-rate movements. The company’s previous treasury structure managed funds in a shared pool spanning US-dollar and local-currency accounts, even though most incoming payments were in dollars and many payouts were made in local currencies.

“The treasury model we used did not fully account for changes in USD to local currency between pre-funding and payout and the conversion prices charged by our payment partners,” Wepundi said.

He added that Payd did not identify the full impact of the losses quickly enough. “Our monitoring did not identify the full effect of the losses early enough. We take responsibility for that,” he said.

According to Wepundi, the company’s payment volume grew from about $500,000 per month in September 2025 to more than $3 million in April and May. He said the fee structure itself was not responsible for the losses; the larger challenge was managing dollar-denominated balances against local-currency payout commitments.

In one example, a payment prefunded at an exchange rate of $1 to 10 local-currency units was withdrawn five days later when the rate had moved to $1 to 13 units. Wepundi said the cost of making some payouts could exceed the dollar value received to fund them.

Fewer currencies and a new settlement model

Payd expanded its offering to 52 currencies at its peak before reducing that number to 35. The company now plans to support 13 currencies as part of efforts to make its model more sustainable.

The startup also plans to maintain a separate record of each customer’s balance and reconcile those records against the funds held for settlement obligations. Instead of holding large amounts of local currency in advance, Payd intends to obtain currency from local partners when a payout is due.

“To make the model sustainable, we needed fewer supported currencies, access to local funds when a payout was due, and closer checks on exchange rates and the actual cost of each payment,” Wepundi said.

The size of the customer deficit has not been disclosed. Payd plans to use revenue to cover day-to-day operations and direct what remains toward the customer deficit over the next six months.

Staffing and strategic options

Payd, founded in 2023, enables freelancers, contractors and businesses to receive international payments and convert them into local currencies. The company said in February that it served about 30,000 users across Kenya, Nigeria, South Africa and Senegal.

Wepundi said the company reduced its team from eight employees to six, comprising four full-time co-founders and two part-time engineers.

Payd has also considered strategic partnerships, new funding and possible mergers or acquisitions. Wepundi confirmed that discussions are ongoing, including consideration of a potential sale, while saying the company is assessing options based on settling customer balances, keeping the business operational and rebuilding value for investors.

The startup has reportedly raised $123,000 from investors and received $43,000 in grants and other support. Its investors and supporters include the Nairobi Business Angels Network, Kaleo Ventures, Celo, Prezenti, Mozilla Africa and Lisk.

Payd relies on licensed payment providers and virtual asset service providers for regulated financial services rather than providing those services directly. Wepundi said the company plans to continue working with regulated partners while restoring its financial and operational stability.