Kenyans Furious as PayPal Freezes Accounts Over Money Laundering Fears

Global payments firm PayPal has frozen money in multiple Kenyan accounts and permanently banned others amid heightened money laundering concerns. Users receiving overseas payments have been asked to submit contracts, bank statements and physical address proof to access their funds.

Those who fail to comply face blocks on transfers and withdrawals for at least six months. Accounts remaining non-compliant beyond that period are permanently deactivated, with balances potentially held without return to senders.

The issue has hit freelancers, individual sellers, start-up operators, creative artists and others who rely on the platform for international earnings. In one case, a freelance writer could not access $190 paid by a UK client after submitting documents that PayPal still flagged as suspicious.

TV personality Terryanne Chebet publicly detailed her experience. She alleged the platform charged an $85 transaction fee then placed funds on hold and deactivated her account. She now waits 180 days for review.

Shee actress also appealed for help after her account containing $517.49 (about Ksh 67,000) was permanently limited. Similar complaints have flooded social media, with users sharing screenshots of red warning notices.

Many Kenyans have described the wave of account restrictions as discriminatory and even racist, pointing out that small legitimate payments from African users are routinely flagged while similar transactions elsewhere face less scrutiny. Online discussions frame it as an "African problem."

Discussions online highlight that Kenya remains on the Financial Action Task Force grey list for money laundering and terrorist financing risks. This has triggered stricter compliance checks by international platforms. PayPal does not make the rules but follows them.

Many users noted that African PayPal accounts fall under jurisdiction in some Asian country, meaning any legal disputes would have to be pursued there. This has left affected Kenyans feeling powerless.

PayPal’s notices state it can no longer offer services for various reasons, including local laws, company policies or partner bank rules. Users can still view balances and transaction history but cannot send or receive payments.

The firm demands exact name matches on identity documents and proof of physical addresses. Many Kenyans struggle with the latter due to reliance on landmarks rather than formal street addresses. It also screens against government watch lists and flags unusual transaction spikes.

Affected accounts cannot easily unlink bank details or open new ones. Future payments may face holds of up to 21 days.

Users pointed out that the problem is not limited to PayPal. Wise, Stripe and Payoneer are also affected, complicating options for Kenyans seeking international payments.

The platform, founded in 1998, processes massive volumes globally but has faced criticism in African markets for aggressive anti-fraud measures. In Kenya it serves freelancers and online shoppers seeking alternatives to sharing card details.

Equity Bank maintains a direct withdrawal partnership, while Safaricom’s M-Pesa has integration. Many users are now shifting to alternatives such as Wise or sticking to mobile money services.

The freezes have sparked widespread frustration online. Kenyans describe the actions as disruptive to legitimate gig work at a time when digital income sources have grown in importance.