Kenyan payments startup Payd is set to resume services on Friday, September 18, after foreign exchange losses left it without enough funds to cover some customer balances. The company paused certain payouts around May following a period of rapid growth that exposed weaknesses in its treasury operations. Payd enables freelancers, contractors, and businesses to receive international payments and convert them into local currencies.
Treasury Mismatch and Foreign Exchange Losses
Founded in 2023 by Benaiah Wepundi, Payd reported about 30,000 users across Kenya, Nigeria, South Africa, and Senegal as of February. Monthly payment volume rose from roughly $500,000 in September 2025 to more than $3 million in April and May 2026, while most incoming payments were in US dollars and customer payouts were in local currencies. That rapid expansion outpaced the company's ability to manage currency risk and created significant exposure to exchange rate movements.
How the Shortfall Emerged
Wepundi said the company's treasury model did not fully account for exchange rate movements between the time payments were prefunded and the time customers withdrew funds. A $100 payment set aside when one dollar equalled ten units of a local currency could require significantly more local currency if the rate later moved to thirteen units. Payd also lacked sufficiently precise tracking across multiple currencies, payout dates, and provider-specific conversion rates.
Customer Disruption and Planned Restart
The payout problems became visible in May, when users reported failed or delayed transfers and some could not send money to Nigeria. Payd denied shutting down, but customers on social media questioned the company's silence as concerns about its stability grew. The company plans to restart its app, WhatsApp chatbot, business platform, and application programming interface on Friday, September 18, allowing users to track balances and choose settlement accounts.
Funding Pressures and Strategic Options
Payd's cash pressures were compounded by limited access to fresh capital after its pre-seed fundraising slowed around March and April. The company secured about $110,000 toward the round across 2025 and 2026 but did not complete it. Wepundi said Payd has raised $123,000 from investors, including $48,000 from Nairobi Business Angels Network and $50,000 from Kaleo Ventures, and has received $43,000 in grants and other support.
A More Conservative Operating Model
To prevent similar losses, Payd is reducing supported currencies from 35 to 13 and changing how it holds money for customer settlements. The company plans to work with local partners to source currency when payouts are due rather than holding large amounts of local currency in advance. It will also maintain separate records of each customer balance and reconcile them against funds held to meet those obligations.
Smaller Team and the Road to Recovery
Payd reduced its team from eight people earlier this year to six, with four full-time co-founders and two part-time engineers. The company intends to fund day-to-day operations from revenue and apply available resources toward the customer shortfall over the next six months, while continuing to rely on licensed payment providers and virtual asset service providers. Wepundi said Payd has explored strategic funding, partnerships, and possible mergers or acquisitions, and those discussions remain ongoing.
Payd's experience highlights a less visible risk in Africa's cross-border payments market, where transaction growth can outpace treasury controls and currency mismatches can erode liquidity. The company's restoration of service is an important step, but its recovery will depend on whether the new model can prevent a repeat of the same failures. Rebuilding customer trust and financial stability will matter more than rising transaction volumes in the months ahead.
Source: TechCabal