Kenyan payroll and payments startup Payd is set to resume operational services following severe disruptions caused by unhedged foreign exchange (FX) losses.
Kenyan financial technology startup Payd is preparing to restore its core payment operations following a prolonged service suspension caused by severe foreign exchange losses that impacted customer balances and disrupted user withdrawals across the platform.
Founded in 2023 by Japheth Achola, Bernard Banta and Japheth Kawangu, the Nairobi-based startup enables freelancers, creators, micro-businesses and gig workers across East Africa to receive cross-border payments and manage multi-currency transactions.
Payd initially paused customer payouts in May 2026 after rapid expansion and volatile currency fluctuations eroded transaction margins. The resulting liquidity strain created severe backlog delays in processing withdrawals to local mobile money wallets like M-Pesa and bank accounts, forcing the startup to suspend operations conducting an internal audit of its transaction flows and work toward stabilizing its financial reserves.
The operational breakdown followed an extraordinary surge in transaction activity that exposed structural weaknesses in Payd’s treasury management and automated foreign exchange risk controls.
Between late 2025 and early 2026, Payd’s monthly processing volume scaled dramatically from roughly $500,000 to over $3 million within a matter of months driven by rapid onboarding of African freelancers accepting payments from international clients in the United States and Europe.
Payd’s business model relied on receiving incoming foreign currencies primarily US dollars and converting them into local African currencies for real-time mobile money and bank settlements. However, sharp, unfavorable fluctuations in the value of the Kenyan Shilling and other regional currencies between trade execution and final settlement led to compounding financial losses.
Because the company did not have robust currency hedging mechanisms in place to absorb these rapid rate movements during high-volume periods, the foreign exchange losses directly absorbed operating capital, creating a significant funding shortfall that forced the freeze on customer payouts.
During the service pause, affected users expressed frustration on social media over delayed payouts and unfulfilled withdrawal requests. In response, Payd’s executive leadership engaged directly with affected account holders offering transparent updates regarding the audit process and working directly with banking partners and payment aggregators to secure emergency liquidity support.
To resolve outstanding customer obligations, Payd has restructured its balance sheet and established a structured settlement framework to ensure every affected user receives their pending funds. The company is processing backlogged payouts in tiered phases, prioritizing smaller retail balances before clearing larger commercial merchant accounts.
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Payd plans to officially resume full platform operations, allowing users to log back into their accounts, track their verified balances and initiate real-time withdrawals. To ensure long-term stability and prevent similar disruptions, the startup has completely overhauled its internal risk management architecture.
Moving forward, Payd is integrating automated foreign exchange hedging tools, setting real-time rate caps and introducing dynamic settlement limits based on market volatility.
The company is also establishing dedicated currency liquidity pools in partnership with regional commercial banks to insulate user funds from sudden foreign exchange shifts.
As services come fully back online, Payd leadership aims to restore market confidence by maintaining transparent processing timelines, providing real-time audit logs, and maintaining strict liquidity buffers for all cross-border transactions.
