Between October and November 2024 alone, M-Pesa saw its subscriber base grow by more than 500,000, bringing its current subscriber base to 34 million active users. These figures are not just numbers but show the number of Kenyans who have trusted M-Pesa services over its 18-year journey since launching in March 2007. If you have been using the M-Pesa service for various transactions, it is no secret that transaction charges must be incurred from your outstanding balance.
The M-Pesa charges mainly vary depending on the range of services offered on M-Pesa (applicable only to sending and withdrawing cash). Other services, such as airtime purchases, savings, and loans, have their own fees separate from the sending charges. The Lipa Na M-Pesa is one of the most innovative services available, enabling businesses to quickly receive payments from their customers. This can be done through Paybill or Till Numbers, which have separate charges and are designed for different business types and transaction volumes.
What are the M-Pesa Paybill charges in 2025?
The best thing about M-Pesa is that it keeps on innovating year in and out. For those who may not be aware, the Paybill is best used to allow businesses to get payments from their customers quickly and is particularly suited for larger businesses, utilities, schools, and service providers that need to collect payments with reference numbers for easy reconciliation. Today, banks, supermarkets, schools, utility companies, and even government agencies have M-Pesa paybills.
However, you must also be aware of the various transaction costs that both customers and businesses incur when using the service. Understanding these charges is crucial for business planning and customer communication.
Unlike sending money to another number or withdrawing from an agent, the M-Pesa paybill (business number) charges are split into three categories (Tariffs): Mgao, Business, and Customer Tariffs, which have their own varying fees. Each tariff structure meets different business models and customer service strategies.
Transaction Limits and Daily Caps
Before we look at the various charges, it’s essential to understand the transaction limits that apply to all M-Pesa paybill transactions:
- Single Transaction Limit: KES 250,000 per transaction
- Daily Transaction Limit: KES 500,000 per day for customers
- Monthly Transaction Limit: KES 3,000,000 per month for registered users
Mgao Tariff Charges
Under the Mgao Tariff, the business and the customer using the Paybill number share the transaction charges. The charges are not split in half but vary depending on the transferred amount, with businesses typically bearing a larger portion of higher-value transaction costs. For both parties, any amount transacted between Ksh 1 and Ksh 100 attracts zero (0) cost transactions, making free small payments and encouraging micro-transactions.
For higher amounts, such as transactions between Ksh 70,001 and Ksh 250,000, the business pays Ksh 84 while the customer pays Ksh 24, bringing the total transaction cost to Ksh 108. This structure makes the Mgao tariff ideal for businesses that want to share transaction costs with their customers while still providing some subsidy.
The complete charges for transactions in this category are shown in the table below:
| Bands (KES) | Business Fee (Ksh ) | Customer Fee (Ksh ) | Total Fee (Ksh ) |
|---|---|---|---|
| 1 – 49 | 0 | 0 | 0 |
| 50 – 100 | 0 | 0 | 0 |
| 101 – 500 | 0 | 5 | 5 |
| 501 – 1,000 | 0 | 10 | 10 |
| 1,001 – 1,500 | 5 | 10 | 15 |
| 1,501 – 2,500 | 7 | 13 | 20 |
| 2,501 – 3,500 | 9 | 16 | 25 |
| 3,501 – 5,000 | 18 | 16 | 34 |
| 5,001 – 7,500 | 25 | 17 | 42 |
| 7,501 – 10,000 | 30 | 18 | 48 |
| 10,001 – 15,000 | 39 | 18 | 57 |
| 15,001 – 20,000 | 43 | 19 | 62 |
| 20,001 – 25,000 | 47 | 20 | 67 |
| 25,001 – 30,000 | 52 | 20 | 72 |
| 30,001 – 35,000 | 62 | 21 | 83 |
| 35,001 – 40,000 | 76 | 23 | 99 |
| 40,001 – 45,000 | 80 | 23 | 103 |
| 45,001 – 50,000 | 84 | 24 | 108 |
| 50,001 – 70,000 | 84 | 24 | 108 |
| 70,001 – 250,000 | 84 | 24 | 108 |
Business Tariff Charges
Under the Business Tariff, instead of sharing transaction charges as in the Mgao Tariff, only the customer who uses the Business Paybill number incurs all the transaction costs, and the business pays nothing. This tariff structure is popular among companies that want to pass all transaction costs to their customers while maintaining competitive pricing on their goods or services.
Similar to the Mgao tariff, any amount transacted between Ksh 1 and KES Ksh is free for all parties involved. The transaction charges increase progressively as the amount increases. For example, for a transaction between Ksh 5,001 – 7,500, the customer will pay a total of Ksh ES 42, while a transaction above Ksh 45,000 attracts a Ksh 108 fee.
Below are all the Business Tariff charges as of 2025:
| Bands (KES) | Business Fee (Ksh ) | Customer Fee (Ksh ) | Total Fee (Ksh ) |
|---|---|---|---|
| 1 – 49 | 0 | 0 | 0 |
| 50 – 100 | 0 | 0 | 0 |
| 101 – 500 | 0 | 5 | 5 |
| 501 – 1,000 | 0 | 10 | 10 |
| 1,001 – 1,500 | 0 | 15 | 15 |
| 1,501 – 2,500 | 0 | 20 | 20 |
| 2,501 – 3,500 | 0 | 25 | 25 |
| 3,501 – 5,000 | 0 | 34 | 34 |
| 5,001 – 7,500 | 0 | 42 | 42 |
| 7,501 – 10,000 | 0 | 48 | 48 |
| 10,001 – 15,000 | 0 | 57 | 57 |
| 15,001 – 20,000 | 0 | 62 | 62 |
| 20,001 – 25,000 | 0 | 67 | 67 |
| 25,001 – 30,000 | 0 | 72 | 72 |
| 30,001 – 35,000 | 0 | 83 | 83 |
| 35,001 – 40,000 | 0 | 99 | 99 |
| 40,001 – 45,000 | 0 | 103 | 103 |
| 45,001 – 50,000 | 0 | 108 | 108 |
| 50,001 – 70,000 | 0 | 108 | 108 |
| 70,001 – 250,000 | 0 | 108 | 108 |
Customer Tariff
The Customer Tariff is entirely the opposite of the Business Tariff. Under this plan, the business pays the entire transaction charges instead of the customer, making all payments free for customers regardless of the amount. This tariff is ideal for businesses that want to absorb all transaction costs to provide a seamless customer experience and encourage higher transaction volumes.
| Bands (KES) | Business Fee (Ksh ) | Customer Fee (Ksh ) | Total Fee (Ksh ) |
|---|---|---|---|
| 1 – 49 | 0 | 0 | 0 |
| 50 – 100 | 0 | 0 | 0 |
| 101 – 500 | 5 | 0 | 5 |
| 501 – 1,000 | 10 | 0 | 10 |
| 1,001 – 1,500 | 15 | 0 | 15 |
| 1,501 – 2,500 | 20 | 0 | 20 |
| 2,501 – 3,500 | 25 | 0 | 25 |
| 3,501 – 5,000 | 34 | 0 | 34 |
| 5,001 – 7,500 | 42 | 0 | 42 |
| 7,501 – 10,000 | 48 | 0 | 48 |
| 10,001 – 15,000 | 57 | 0 | 57 |
| 15,001 – 20,000 | 62 | 0 | 62 |
| 20,001 – 25,000 | 67 | 0 | 67 |
| 25,001 – 30,000 | 72 | 0 | 72 |
| 30,001 – 35,000 | 83 | 0 | 83 |
| 35,001 – 40,000 | 99 | 0 | 99 |
| 40,001 – 45,000 | 103 | 0 | 103 |
| 45,001 – 50,000 | 108 | 0 | 108 |
| 50,001 – 70,000 | 108 | 0 | 108 |
| 70,001 – 250,000 | 108 | 0 | 108 |
What are the charges for M-PESA Till payment?
Another feature of the Lipa Na M-Pesa is the Till Number, a service best suited for retail businesses such as supermarkets, restaurants, hardware stores, pharmacies, and other point-of-sale establishments where customers directly pay for purchased goods or services at the point of sale. The M-Pesa Till charges differ significantly from the Paybill/Business number charges and are designed to be simpler and more cost-effective for small to medium-sized businesses.
Here, there are no complex tariff structures; instead, transactions are completely free for all customers regardless of the amount they pay. However, businesses will incur a charge of 0.5% of payments above KSh 200, which is capped at KSh 200 per transaction. This means that regardless of the payment amount, a customer pays nothing, while the business pays a maximum fee of Ksh 200 per transaction.
| Transaction Amount (Ksh ) | Customer Pays | Business Pays (Max Ksh 200) |
|---|---|---|
| 0 – 200 | FREE | FREE |
| 201 | FREE | Ksh 1 (0.5% of Ksh 201) |
| 500 | FREE | Ksh 2.50 (0.5% of Ksh 500) |
| 1,000 | FREE | Ksh 5 (0.5% of Ksh 1,000) |
| 10,000 | FREE | Ksh 50 (0.5% of Ksh 10,000) |
| 40,000 | FREE | Ksh 200 (capped fee) |
| 50,001 – 70,000 | FREE | Ksh 200 (capped fee) |
| 70,001 – 250,000 | FREE | Ksh 200 (capped fee) |
How to Choose Between Paybill and Till Numbers
Selecting the right payment method depends on your business model, transaction volume, and customer base:
Choose Paybill When:
- You need to collect payments with specific reference numbers (invoice numbers, account numbers)
- You operate a utility company, school, or service provider requiring detailed payment tracking
- You process high-volume transactions that require detailed reporting and reconciliation
- You want to offer flexible charge-sharing options to customers
- You need integration with existing accounting or ERP systems
Choose Till When:
- You operate a retail business with point-of-sale transactions
- You want to minimize customer transaction costs to encourage more sales
- You prefer simple, predictable pricing for your business
- You need the immediate settlement of funds
- Your business model can absorb the 0.5% processing fee
FAQs
Who pays the charges for M-Pesa Till payments?
M-Pesa Till payments only affect business owners rather than customers. For any payment above Ksh 200, a business will incur a cost of 0.5% on that amount, capped at Ksh 200 per transaction.
How much does it cost to transact Ksh 5,000 using M-Pesa Paybill?
M-Paybill charges vary by tariff. Under the Mgao Tariff, where both business and customer share charges, the business pays Ksh 18, and the customer pays Ksh 16, totaling Ksh 34. Under the Business Tariff, only the customer pays Ksh 34. Under the Customer Tariff, only the business pays Ksh 34.
Conclusion
Well, we hope this guide has helped you understand Lipa Na M-Pesa’s various charges. As we have covered in the article, the charges will be split under various Tariffs when using the Pay bill or the business number. On the Till number, charges are applied to businesses only at 0.5% of the paid amount but capped at Ksh 200 per single transaction.
