PayU Kenya Winds Down Operations: Liquidation Follows M-Pesa Dominance and CBK License Revocation

The Kenyan subsidiary of PayU, the global financial technology powerhouse, has officially concluded its operations, initiating the formal liquidation process after six years of attempting to establish a foothold in the competitive East African market. This decision represents a watershed moment, starkly illustrating the immense difficulties international payment processors face when attempting to penetrate markets already dominated by deeply entrenched, localized ecosystems.

The formal winding down of activities commenced on August 19, 2025, when the company appointed Sona Tejpal as the liquidator, acting under the provisions of the Kenya Insolvency Act. This decisive step was necessitated by a series of operational setbacks, chief among them being the near-total market stranglehold exerted by Safaricom’s M-Pesa service. M-Pesa commands an overwhelming share, controlling more than 95% of all mobile money transactions conducted within the country. Despite the substantial backing from its parent company, Prosus, and its operational presence across more than 50 global markets, PayU Kenya ultimately failed to capture any meaningful market share.

Compounding the operational challenges was the subsequent regulatory action taken by the Central Bank of Kenya (CBK). The CBK formally revoked PayU Kenya’s operating license, with the decision taking effect on October 13, 2025. This official notification was signed by the Governor of the CBK, Dr. Kamau Thugge. It is crucial to note that the license revocation occurred subsequent to the company’s voluntary decision to initiate liquidation. This sequence of events suggests that the primary driver for the exit was the fundamental non-viability of the business model under existing market conditions, rather than direct external regulatory compulsion.

PayU first launched its services in Kenya in February 2019, entering the market through a strategic partnership with the pan-African processing hub, Cellulant. The initial ambition was to serve as a crucial bridge connecting global e-commerce platforms with the necessary local payment solutions. However, the path was fraught with obstacles. Cellulant itself encountered significant difficulties, including staff reductions and the cancellation of a funding round in 2022. Furthermore, intense competition from established players like Airtel Money and PesaPal made it impossible for PayU to carve out a sustainable niche.

The withdrawal of PayU Kenya does not impact the wider global operations of Prosus, which is undergoing a strategic restructuring in 2025 that includes scaling back its presence in smaller African markets. Nevertheless, this event serves as a potent case study. It underscores the reality that success in such a dynamic financial environment requires more than just deploying cutting-edge technology; it demands profound integration into local consumer behavior patterns and an ability to navigate the unique competitive landscape. The story of PayU Kenya highlights that sometimes, even global giants find it impossible to dislodge a local champion whose roots run deep.