Kenyan fintech Payd is preparing to resume services after foreign exchange losses left the company short of the funds needed to meet some customer balances.
The payments startup plans to restart its services on Friday, September 18, following months of disruption that began around May. The company has also overhauled its treasury system to address the currency mismatches that contributed to the problem.
Founded in 2023 by Benaiah Wepundi, Payd helps freelancers, contractors, and businesses receive international payments and convert them into local currencies. As of February, the company said it had about 30,000 users across Kenya, Nigeria, South Africa, and Senegal.
Payd’s troubles highlight a less visible risk in Africa’s fast-growing cross-border payments market: moving more money does not necessarily mean making more money.
A fintech can process millions of dollars in transactions and still run into trouble if it does not accurately manage the currencies, exchange rates, timing, and costs involved in settling those payments.
Payd has denied that it shut down its operations. However, its services stopped working for some customers, leaving them unable to complete transfers and prompting questions about what was happening.
Customers also raised concerns online about failed and delayed transfers, with some saying the platform had stopped working without a clear explanation.
Payd plans to restore services across its app, WhatsApp chatbot, business platform, and application programming interface (API).
“Ahead of the restart, users will be able to track their existing balances and choose the accounts into which settlements will be paid,” Wepundi said.
But getting the platform back online is only part of the challenge.
The company’s rapid growth exposed weaknesses in the way it managed its treasury operations. Payd’s monthly payment volume grew from about $500,000 in September 2025 to more than $3 million in April and May 2026, according to Wepundi.
During that period, the company supported as many as 52 currencies. It later reduced that number to 35 and now plans to cut it further to 13.
The problem was partly caused by the gap between the US dollars Payd received and the local currencies it needed to use when customers requested payouts.
The company did not adequately account for the cost of maintaining those local-currency obligations as exchange rates changed.
By the time Payd fully understood the scale of the problem, accumulated FX losses had affected the funds available to cover some customer balances.
“At times, the dollar cost of making those payouts was higher than the dollar amount received to fund them,” Wepundi said. “We didn’t accurately track these changes across the rates we offered on the platform and the rates our providers offered.”
Payd’s previous treasury model also pooled funds across US dollar and local-currency accounts. Most incoming payments arrived in dollars, while many customer payouts were made in local currencies.
That created an exposure to exchange-rate movements.
For example, a $100 payment could be prefunded at an exchange rate of $1 to 10 units of a local currency. If the customer withdrew the money five days later, when the rate had moved to $1 to 13 units, Payd would need more local currency than it had originally set aside.
Multiply that across several currencies, payout dates and payment providers, and the gap could become significant.
“Our monitoring did not identify the full effect of the losses early enough. We take responsibility for that,” Wepundi said.
From rapid growth to a payout crunch
Payd’s payout problems became visible to customers in May, when the company paused some payouts.
Some customers reported being unable to use the platform to make transfers to Nigeria. In at least one case, the company attributed the disruption to downtime on the app.
The situation reflects a broader challenge for African fintechs operating across borders.
Cross-border payments can generate revenue as transaction volumes grow, but they also expose companies to liquidity, settlement and foreign-exchange risks between the moment money enters the system and when it is paid out.
Payd had been expanding rapidly before the disruption.
A partnership with Noah in February allowed the company to embed stablecoin-based payment rails. By March 2026, Payd was marketing access to more than 35 countries and positioning itself as a platform for workers and businesses operating across borders.
The company says it works with licensed payment providers and virtual asset service providers (VASPs) for regulated financial services rather than providing those services directly.
The growth was reflected in its transaction volumes.
In January, Wepundi said Payd had reached break-even in September 2025, with average monthly recurring revenue of about $10,000.
By December, he said the company had crossed $1 million in monthly transaction volume and was targeting $10 million in monthly transaction volume and $300,000 in monthly recurring revenue over the following 12 months.
Payd generates revenue through transaction fees, FX margins and business-to-consumer products such as APIs and bulk payments.
But as payment volumes increased, so did the amount of money moving through its system and the financial impact of weaknesses in its treasury model.
The economics behind the mismatch
Payd charges fees on incoming payments and payouts and also earns a margin when customers convert currencies.
Wepundi said the company earned about $1.50 on an average $100 transaction, while payment providers typically took between 30 cents and 75 cents. That left Payd with roughly 75 cents to $1.20 before expenses such as salaries, technology and compliance.
According to Wepundi, the fee structure itself was not the source of the losses.
The bigger issue was managing the relationship between customer balances denominated in dollars and the local currencies required to settle those balances.
“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,” he said.
Payd is now reducing the number of currencies it supports and changing how it sets aside money for customer settlements.
The company plans to maintain a separate record of each customer’s balance and reconcile those balances against the funds held to meet them.
It is also working with local partners to source currencies when payouts are due, rather than holding large amounts of local currency in advance and repeatedly converting funds across different markets.
The approach is designed to reduce Payd’s exposure to FX movements.
The company has also reduced its team from eight people earlier this year to six. The current team consists of four full-time co-founders and two part-time engineers, according to Wepundi.
Funding pressure
Payd’s treasury problems were compounded by limited access to fresh capital.
Over the past six months, the company has explored strategic partnerships, new funding, and potential mergers or acquisitions, Wepundi said.
Payd had been raising a pre-seed round and secured about $110,000 toward the round across 2025 and 2026. However, the company did not complete the raise after fundraising conditions slowed around March and April.
The funding was initially intended to support regulatory and licensing work in the United States, Canada and Rwanda. Those plans have since been paused.
Wepundi said Payd has raised $123,000 from investors, including $48,000 from Nairobi Business Angels Network (NaiBAN) in 2025 and $50,000 from Kaleo Ventures in the first quarter of 2026.
The company has also received $43,000 in grants and other support from blockchain networks including Celo, through Prezenti and Mozilla Africa, and Lisk.
That brings Payd’s total funding and non-equity support to $166,000.
For now, the company plans to rely on revenue to fund its day-to-day operations and use what remains to address the customer deficit over the next six months, rather than immediately pursue a large funding round.
Wepundi did not disclose the size of the deficit.
A restart and a test of trust
Payd has also considered a potential sale as part of its efforts to stabilise the business.
“Over the past six months, we have explored strategic partnerships, strategic funding, and potential mergers or acquisitions. Those discussions are ongoing,” Wepundi said.
He said the company is assessing those options around four priorities: settling customer balances, keeping Payd operating, rebuilding value for existing and future investors, and developing the company into payments infrastructure for the future of work.
For now, the immediate priority is getting the platform operating again under a new treasury model.
That makes the restart more than a technical exercise.
Payd now has to restore customer access, address the outstanding shortfall and demonstrate that its new treasury controls can handle the volume of money moving through the platform.
The company grew its monthly payment volume from roughly $500,000 to more than $3 million in less than a year.
Its next chapter will depend not simply on how quickly that volume returns, but on whether Payd can manage those transactions without repeating the currency mismatches that put customer balances at risk.
“We have worked with regulated partners for services requiring authorisation, and our immediate plan is to continue with that approach while restoring financial and operational stability,” Wepundi said.
“We would then resume raising capital for our own regulatory approvals and further expansion.”