Billboards splashed throughout Nairobi. Social media adverts with cheeky jabs at rivals. Open criticism of unfair enterprise practices. Viral posts driving conversations on-line.
Over the past six months, Payless Africa, a Nairobi-based fintech-cum-neobank, has been making an attempt to seize consideration in Kenya’s crowded fintech house. Based in 2024 by Kev Muley, the corporate needs to develop quick, betting that visibility and aggressive advertising will assist it carve out market share. Many startups use this playbook: develop first, chase profitability later.
Kenya’s fintech market is dominated by M-PESA, a cellular cash product that has lengthy outlined how folks ship and obtain cash. Over 200 licenced fintech gamers additionally goal the identical younger, city clients. But, regardless of its scale, M-PESA and comparable companies usually deal with funds and monetary well being as separate experiences. Payless claims to place itself otherwise to merge these capabilities in a means that feels extra related to Era Z, anybody born between 1995 and 2010.
However what precisely does Payless do?
Payless has constructed a digital platform to assist younger Kenyans transfer cash, save, and make funds. The startup blends fundamental pockets companies with financial savings instruments and monetary literacy options. It creates an expertise that feels straightforward to make use of, even for these much less conversant in formal banking merchandise.
Neobanks like Payless pitch themselves as a less expensive, extra versatile different to conventional banks. They thrive on low overheads and tech-driven companies and are higher suited to the fast-changing calls for of youthful customers.
Payless’ technique focuses on younger folks. These customers are digital-first, socially linked, and count on companies that perceive their behaviour. However Payless is cautious to border its product as accessible past tech-savvy audiences. Simplicity, low prices, and relatable instruments are meant to attract in customers who could also be new to digital finance however share widespread frustrations round costly or fragmented monetary companies.
“Whereas Gen Z is tech-savvy and types our core audience, Payless has broader enchantment as a result of it addresses common ache factors in cash administration,” Derrick Gakuu, Product and Innovation Head, advised TechCabal.
The licencing headache
Kenya’s regulators are powerful on fintech and banks, which makes licences tough to get. Gakuu advised TechCabal that Payless doesn’t but maintain a direct licence from the Central Financial institution of Kenya (CBK). As an alternative, it operates underneath the regulatory cowl of Webtribe (Jambopay), a licenced Cost Service Supplier (PSP).
This construction was designed to scale back obstacles to market entry to permit Payless to give attention to validating its mannequin whereas counting on Webtribe for compliance, onboarding requirements, and anti-money laundering checks.
Nonetheless, working underneath one other firm’s licence introduces dependency danger. Any regulatory situation, suspension, or compliance failure at Webtribe might expose Payless to service disruptions or oblique penalties, particularly as Kenya tightens fintech oversight.
“The Central Financial institution of Kenya really helpful this method to speed up market entry, obtain crucial mass, and validate the enterprise mannequin earlier than pursuing direct licensing,” Gakuu stated.
Nevertheless, Payless controls product design, buyer acquisition, and repair supply. Its partnership with Webtribe allows scale with out the quick stress of securing a licence, although the corporate plans to method regulators instantly because it grows.
Working with conventional banks
Past this, Payless has signed Memorandums of Understanding (MoU) with three banks, which Payless didn’t disclose. These partnerships usually are not nearly ticking regulatory packing containers but in addition about co-developing merchandise that align with Gen Z’s monetary behaviours.
“Relating to our banking companions, we can not disclose particular names at this stage, however we’re working with established native and regional banks to deliver these improvements to life,” Gakuu stated.
The collaboration will introduce financial savings instruments, funding merchandise, card companies, worldwide cash transfers, and credit score choices like overdrafts. Per Payless, the objective is to embed these companies contained in the Payless app and make them a part of day by day transactions somewhat than standalone merchandise.
How does Payless generate income?
Payless earns income primarily from transaction charges. The neobank retains prices intentionally low however shouldn’t be completely free. Free peer-to-peer transactions are supplied to customers underneath 24 and on transfers beneath KES 1,000 ($8). That is meant to encourage engagement and habit-building early in a consumer’s monetary journey.
However this raises a well-recognized query for digital-first banks: is that this income mannequin sustainable in the long run? International neobanks usually wrestle to transform excessive consumer exercise into revenue. Payless is betting that future merchandise will offset these skinny margins, although this stays dangerous.
Over time, Payless expects new income from monetary companies like Payless Y and Payless Z, service provider merchandise such because the Woza Service provider App, and digital marketplaces for companies like ticketing and bookings.
Payless Y handles day by day cash duties like chat-to-pay, automated payments, and group cost-sharing in on a regular basis conversations. Payless Z provides financial savings, investments, and insurance coverage. Customers can entry cellphone safety and experience-based cowl and save in the direction of targets by means of accomplice banks. These additions will deliver commissions, curiosity earnings, and different transactional earnings to strengthen its enterprise mannequin.
Kenya has no scarcity of neobanks
Competitors on this house is intense. Safaricom’s M-PESA stays dominant, whereas newer entrants like NCBA LOOP, Ecobank-backed Fingo, Department, and Umba push digital-first banking experiences. Payless sees its benefit in understanding how Gen Z interacts with cash by focusing much less on conventional banking and extra on flexibility.
Payless acknowledges the boundaries of its mannequin. It doesn’t plan to maneuver into complicated company or funding banking, since its energy lies in providing embedded monetary companies that help on a regular basis choices by serving to customers save, borrow, insure, and spend with out shifting between platforms.
“Whereas our main focus is on embedded monetary companies for people—financial savings, playing cards, insurance coverage, and investments—we see immense worth in strategic collaborations,” Gakuu added.
Eyeing enterprise capital funding
Payless has grown by means of founder bootstrapping, partnerships with sister firms in media (NRG Radio), occasions, and influencer advertising to construct early traction. Per Gakuu, this allowed the corporate to check demand, refine its product, and keep in management. Nonetheless, scaling in fintech requires greater than natural development.
Payless has not raised angel or VC funding however plans to have interaction buyers in 2025. The main focus is to boost capital for increasing merchandise, embedded monetary companies, and market attain whereas protecting management of its course.
However investor sentiment in the direction of neobanks is cooling globally. Many VCs now demand clear paths to profitability earlier than writing cheques. Whether or not Payless can entice funding in 2025 could rely much less on obtain numbers and extra on proving it will probably flip transactions into sustainable income.
“Whereas we’re not actively looking for funding proper now, our development technique consists of making ready for investor engagement by Q1 2025,” Gakuu stated.
Payless is betting that its mix of affordability, relevance, and embedded monetary companies will construct long-term loyalty, significantly as its core customers get older and their monetary wants turn into extra complicated.
Payless claims its app has been downloaded over 500,000 occasions, with 278,000 profiles created. Of those, 270,000 customers are lively. It additionally claims that customers have saved over KES 27 million, with common particular person financial savings at KES 900. Transaction quantity up to now stands at $20 million.
The true take a look at will come when Payless seeks direct licencing or scales into new markets. With the CBK tightening scrutiny over digital lenders and funds, regulatory compliance, competitors, and profitability could outline whether or not Payless thrives or fades.
Whether or not this is sufficient to problem the established gamers or survive the pressures of scaling in a aggressive market stays an open query.
