PayPal Holdings Inc. has tightened controls on Kenyan accounts, freezing funds and restricting access for some users as the company ramps up anti-money laundering (AML) compliance in higher-risk markets.
Freelancers, online merchants and remote workers say they have faced sudden limitations—sometimes permanent—even after submitting requested documentation such as work contracts, invoices and bank statements. The measures have disrupted cross-border payments that many rely on for income.
The payments firm has expanded verification requirements, asking selected users to confirm their identity, address and sources of funds. Requests include government-issued IDs, utility bills, transaction histories and explanations for incoming payments, with some accounts remaining locked until reviews are completed.
Local market dynamics have added complexity to the process. Many Kenyans rely on mobile money for everyday transactions, including utility payments, and a significant share of users operate as freelancers or crypto traders, often generating high transaction volumes that can trigger AML alerts. The country’s limited formal addressing system can also make standard proof-of-address requirements harder to meet.
The tighter controls follow increased regulatory pressure on jurisdictions under enhanced monitoring. Kenya has been on the Financial Action Task Force (FATF) grey list since February 2024, a designation that flags gaps in anti-money laundering and counter-terrorism financing frameworks and typically prompts global financial platforms to apply stricter scrutiny.
Industry observers also point to rising fraud risks tied to the platform’s ease of use, particularly following its integration with M-Pesa, Kenya’s dominant mobile money service operated by Safaricom Plc. While the linkage has streamlined cross-border transactions for millions, it has also increased transaction volumes and complexity, attracting closer attention from compliance teams.
For affected users, delays in accessing funds have disrupted cash flow, complicating both personal finances and business operations. Workers in sectors such as software development, digital marketing and content creation are among those impacted.
Accounts that fail to meet verification standards can remain restricted for months, while permanently limited accounts may see balances held for up to 180 days to cover potential chargebacks or disputes. In some cases, prolonged reviews can lead to account closures.
The clampdown highlights the trade-off between stronger financial safeguards and access to global payment systems in emerging markets. While stricter checks are designed to deter illicit activity, they can also create friction for legitimate users, some of whom say enforcement appears more stringent than in other regions.
PayPal is widely used in Kenya as a conduit for international transactions, linking local freelancers and businesses to overseas clients. Interruptions to that flow risk undermining a fast-growing segment of the digital economy.
Users undergoing reviews are advised to ensure account details are accurate and to retain supporting documentation to help expedite verification. Funds are generally recoverable even after permanent limitations, though timelines can be extended.