A widely shared post by Kenyan fintech expert, Robert Kingori, has struck a nerve with many African users who feel increasingly sidelined by PayPal’s new policies.
The post, which has gained traction on LinkedIn, highlights how the policies expected to take effect on April 21 2o25 are making the platform even less viable for Africans who rely on it for international transactions.
PayPal has long been accused of horrible service by African users who comprise the likes of gig workers and cross-border trade merchants. In Kenya and other developing nations, PayPal has been receiving backlash from users who have seen the platform hold cash without giving them any explanations.
As reported by BitKE in 2024, Mercury, a popular banking partner for the startup world, said it will likewise close the accounts of users in several countries including thirteen African countries due to U.S. federal scrutiny.
🇧🇮🇨🇲🇨🇫🇨🇩🇨🇬🇱🇷🇲🇱🇲🇿🇳🇬🇸🇴🇸🇸🇸🇩🇿🇼REGULATION | Mercury Digital Bank to Close Accounts of Startups in 13 African Countries Due to U.S. Federal Scrutiny
Mercury’s services were crucial for African startups allowing them to operate with U.S. dollar accounts, crucial for attracting and… pic.twitter.com/AXGWsJsMsW
— BitKE (@BitcoinKE) July 24, 2024
One of the biggest concerns raised in the LinkedIn post is the sharp hike in transaction fees.
According to Kingori, receiving payments from abroad will now cost 4.90% plus a fixed fee in most African markets. For freelancers, e-commerce sellers, and businesses, this translates to a significant loss in earnings. Many users are questioning whether PayPal still serves their needs.
Withdrawals have also become more expensive. Kenyan users withdrawing amounts below KES 20,000 will now be charged KES 105, disproportionately affecting those who depend on frequent, smaller withdrawals for daily expenses. Additionally, withdrawing to a U.S. bank account – a previously free option – will now come with a 3% fee, making international money transfers even less affordable.
Another major frustration is the introduction of dispute fees. PayPal will now charge $8 for standard disputes and $16 for high-volume disputes – regardless of the outcome. Even if a user wins a dispute, they still have to pay. Many see this as an unfair attempt to monetize customer frustrations.
To make matters worse, PayPal has added a new fee for ‘Withdrawals through third-party service providers,‘ impacting users who rely on platforms like M-PESA, local banks, and other financial services to access their funds.
Kingori’s LinkedIn post has drawn responses from industry professionals and fintech experts who argue that African users should move towards alternative payment solutions.
Jesse Byarugaba, Founder of MorzePay, asked why anyone would still use PayPal in this era of crypto and fintech alternatives.
“Eversend should be the number one choice,” he said, encouraging support for homegrown payment platforms.
Indeed, cryptocurrencies, particularly stablecoins, are proving themselves to be a viable alternative to the costly pre-existing cross-border trade mechanisms such as PayPal. The growth in the numbers has been highlighted by companies such as Tether (USDT) which has seen its growth in 2024 largely fuelled by adoption in emerging markets, such as Africa.
STABLECOINS | Majority of New $USDT Users Are Coming from Emerging Markets, Including African Cities, Says a Bloomberg Analysis
According to Ardoino, Tether has just over 300 million users globally.https://t.co/DQz6v1xCHi @Tether_to @paoloardoino pic.twitter.com/jXthoNYyGt
— BitKE (@BitcoinKE) November 6, 2024
Besides, many of the cutting-edge consumer fintech startups today are employing stablecoins to address the high cross-border transaction opportunity. This includes, most recently Azamra and Cauridor in francophone Africa, and the likes of JuicyWay and Mansa.
In Kenya, the International Monetary Fund (IMF) has revealed that many Kenyan firms are now using cryptocurrencies to pay foreign suppliers during dollar shortages or periods of Kenya Shilling depreciation. Domestic companies are said to be making regular use of stablecoins such as $USDT as a means of payment to settle contracts with foreign suppliers.
[TECH] STABLECOINS | Private Firms in Kenya Turn to Stablecoins to Pay Foreign Suppliers, 49% Use USDT, Says IMF: The International Monetary Fund (IMF) has revealed that many Kenyan firms are now using crypt.. https://t.co/iZWzG1PM4Y via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) January 13, 2025
Despite being one of the fastest-growing fintech regions, PayPal’s approach seems to alienate African users rather than foster financial inclusion. Instead of adapting to local market conditions, PayPal appears to be making it harder for Africans to participate in the global digital economy.
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