Singaporean targets Kenya-China trade with new payment platform

A Singaporean entrepreneur, George Chan, has identified an opportunity to streamline payments between small traders in Kenya – who deal in products ranging from Chinese-made jewellery to car parts – and suppliers in mainland China. Together with his partner and co-founder, April Long, Chan has established a company called Pyxis, aimed at facilitating cross-border trade through partnerships with Chinese payment giants Alipay and WeChat Pay. Although Pyxis is headquartered in Singapore, both Chan and Long reside in Nairobi.

In an interview with the NTU-SBF Centre for African Studies, Chan highlighted that many shopkeepers in Kenya are eager to offer unique products rather than those commonly distributed by wholesale importers. To achieve this, they need to establish direct relationships with suppliers in China.

However, making payments to Chinese suppliers remains both difficult and expensive for small retailers. Banks tend to prioritise larger traders, and the process of converting Kenyan shillings into US dollars and then into Chinese yuan incurs various costs and administrative burdens.

Moreover, many shop owners in Kenya lack formal bank accounts, relying instead on M-Pesa, the ubiquitous mobile money platform with over 30 million active subscribers. Others use the hawala system, an informal method of transferring money without the physical movement of cash. In Kenya, importers often use hawala networks to pay for goods from China by handing over cash to a local hawala agent, who then contacts a counterpart in China to disburse the equivalent amount to the Chinese supplier, bypassing traditional banking systems. However, this practice is illegal in China.

Chan and Long wanted to create a solution that is regulated yet avoids the bureaucracy and high fees associated with traditional banking, while maintaining the efficiency of the hawala system. Thus, Pyxis was born.

Pyxis has partnered with Alipay and WeChat Pay to facilitate fund transfers from Kenya to China. Unlike traditional methods, the platform allows for the direct conversion of Kenyan shillings into yuan, bypassing the usual step of converting to US dollars first. Currently in its pilot phase, Pyxis supports payments from both M-Pesa and bank accounts. Although M-Pesa has an existing direct integration with Alipay, Chan notes that payments through this channel are often rejected. Pyxis addresses this by gathering comprehensive know-your-customer (KYC) data and performing thorough verifications to ensure successful transactions.

In 2023, Kenya imported goods worth US$3.28bn from China, but Chan believes the actual figure is much higher, as many products enter the country through unofficial channels.

Before establishing Pyxis, Chan worked for Singapore-based CrimsonLogic, which has developed various e-government solutions for African countries. He later served as the general manager for Africa at Singapore-headquartered trade technology company GUUD, founded by entrepreneur Desmond Tay, which has completed several projects in Africa. Chan believes his background, combined with Long’s experience managing the China desk at Standard Chartered Bank Kenya, gives them a unique perspective to tackle these challenges. Their fluency in Chinese and understanding of both Kenyan and Chinese financial systems have also proven beneficial.

 

References

‘Kenyans abroad avoiding banks on sending money home’, The East African, 08 June 2023

‘New platform allows Kenyan traders to pay for Chinese goods via Alipay’, Business Daily, 22 August 2024

‘Technology to boost e-commerce role in China-Africa trade’, China Daily, 27 August 2024

‘AliPay M-PESA’, Safaricom, Accessed 28 August 2024

‘Bilateral trade between Kenya and China’, International Trade Centre, Accessed 28 August 2024

‘Safaricom PLC annual reports and financial statements 2024’, Safaricom, Accessed 28 August 202