PayPal Freezes Kenyan Accounts Over Strict Verification Rules, Leaving Freelancers Locked Out of Funds

PayPal has frozen funds in some Kenyan accounts and imposed permanent limitations on others, citing failure by users to comply with enhanced verification requirements, in a move that has left freelancers and small business owners unable to access earnings from global platforms.

The restrictions have been linked to the company’s strengthened anti-money laundering (AML) compliance measures, which require users to provide detailed documentation including proof of employment, contracts, bank statements, and verified physical addresses.

The developments come against the backdrop of Kenya’s inclusion on the Financial Action Task Force (FATF) grey list since February 2024, a designation associated with weaknesses in combating money laundering and terrorist financing. The listing has triggered tighter scrutiny of cross-border financial transactions involving Kenyan users.

Many of those affected are freelancers and digital workers who rely on platforms such as Upwork and other online marketplaces for income. Some users report having funds frozen indefinitely or accounts permanently limited, effectively cutting off access to their earnings.

Screenshots shared online show account restrictions and locked balances, with frustrated users calling for clearer communication and more flexible verification processes.

The situation has also prompted a shift among some digital workers, with a section of users reportedly exploring alternative payment platforms such as Wise and Payoneer to avoid disruptions.

Financial experts say the crackdown highlights the increasing pressure on global payment processors to comply with international compliance standards, especially in jurisdictions flagged for higher financial risk.

Kenyan authorities have in recent months indicated efforts to address FATF concerns through new legislation and stricter enforcement mechanisms, with the goal of exiting the grey list by mid-2026.