M-Pesa Charges Explained And How To Cut Them (2026)

What you are actually paying for

Almost every Kenyan adult uses mobile money, and almost nobody knows what it costs them in a year. The charges are small, frequent and invisible — a few shillings here, a couple of hundred there — which is exactly why they add up quietly. A household that withdraws cash three times a week is easily giving up several thousand shillings a year in fees alone.

The good news is that M-Pesa charges are not random. They follow a structure, and once you understand the structure you can route almost all of your everyday money through the parts that are free or nearly free. Very little of this requires you to change banks, switch networks or give anything up. It mostly requires you to stop doing one expensive thing: turning digital money back into cash.

This guide explains how the fees are built, where the money actually leaks, and what to do about it. It sits alongside our wider guide on how to manage money on M-Pesa.

How the charging structure works

M-Pesa does not charge a percentage on person-to-person transfers. It charges a fixed fee per band. Every transfer falls into a bracket, and everything inside that bracket costs the same.

Three consequences follow, and they are the whole game:

1. The sender pays. On a normal person-to-person transfer, the fee comes off the sender. The recipient gets the full amount.
2. Small transfers are free or nearly free. Safaricom's published tariff makes person-to-person transfers at the very bottom of the scale — currently up to KSh 100 — free.
3. The top band is flat. Above a certain point the fee stops rising. Safaricom's send-money fee is capped, and the Central Bank confirmed in September 2023 that "the respective current tariff for transactions of up to Ksh.150,000 will apply for transactions of up to Ksh. 250,000."

That third point is worth reading twice, because it reverses an instinct many people have. If you owe someone KSh 200,000, sending it once is cheaper than sending it four times. Splitting a large payment into chunks does not save you anything — it multiplies the fee. People split payments out of caution, not arithmetic, and it costs them.

Charges do change. Safaricom revised its business tariffs on 7 August 2026, for example. Always confirm the live figure on Safaricom's own tariff page or by dialling the M-Pesa menu before assuming a rate you read anywhere — including here.

The 15% tax inside every fee

Part of what you pay is not Safaricom's at all. It is excise duty going to the Kenya Revenue Authority.

Excise duty applies to the fee, not to the money you are sending. If you transfer KSh 5,000 and the fee is KSh 30, the tax is charged on the KSh 30 — not on the KSh 5,000. This is a common source of panic that turns out to be unfounded.

The rate is 15%. The Finance Act 2023 harmonised it: money transfer fees charged by cellular phone service providers and payment service providers rose from 12% to 15%, while fees charged by banks, money transfer agencies and other financial service providers came down from 20% to 15%. Both landed on the same number from 1 July 2023.

The Finance Bill 2024 proposed pushing both back up to 20%, but that Bill was withdrawn in full and the increase never took effect. Anyone quoting 20% on mobile money fees today is working from a proposal, not the law.

Two practical implications. First, the fee you see on your statement already includes this tax — you are not billed for it separately. Second, because the tax is a percentage of the fee, anything that cuts the fee cuts the tax with it. Every shilling of fee you avoid saves you 15% again on top of it.

Withdrawal is where the money actually goes

If you audit a year of M-Pesa statements, the single largest line is almost never sending money. It is cash withdrawal.

Agent withdrawal fees run from a low double-figure amount on the smallest withdrawals up to a few hundred shillings on the largest. ATM withdrawals from an M-Pesa balance sit on their own separate tariff. Either way, the cost per withdrawal is meaningful and it repeats every single time you do it.

The expensive pattern looks like this, and it is extremely common:

Salary lands in the bank → moved to M-Pesa (fee) → withdrawn at an agent (fee) → spent as cash at a shop that has a till number anyway.

That is two fees paid to arrive at a payment that could have been made directly for nothing. The money made a round trip through cash for no reason at all.

The costly habit is not "using M-Pesa". It is converting to cash out of reflex. If you are unsure how to trace where these charges land, our guide on how to read your bank statement applies to your M-Pesa statement too — you can request a full statement from the M-Pesa menu on your phone.

The rails that are free to you

This is the part most people underuse.

Buy Goods (Lipa na M-Pesa till). Paying a merchant by till number is free to you as the customer, at any amount. The merchant pays the collection fee, not you. From 7 August 2026 Safaricom raised the merchant's free collection threshold from KSh 200 to KSh 500, with collections above that attracting 0.55% capped at KSh 200 — so small traders now keep more of small payments too. Fuel stations are the notable exception where customers do face a charge.

Pochi la Biashara. Aimed at small traders — mama mbogas, boda riders, hawkers — who need business money kept separate from personal money. Under a 90-day promotion that ran from 1 August 2026, customer payments up to KSh 200 through Pochi carry no charge. That promotion was set to run to 31 October 2026, so treat it as temporary until Safaricom says otherwise.

Paybill. Used by utilities, schools, landlords, insurers and SACCOs. Paybill charges vary by biller and some absorb the cost entirely. CBK cut paybill collection and disbursement tariffs by an average of 50% from January 2023.

The distinction between these three matters more than people think, especially if you run a business — we cover it in detail in paybill vs till vs Pochi la Biashara.

Balance enquiries and PIN changes are free. So is receiving money.

Bank-to-wallet transfers are not free any more

A myth that refuses to die: that moving money between your bank account and your M-Pesa wallet is free.

It was, temporarily. CBK waived those charges on 16 March 2020 as a Covid-19 emergency measure. It then reintroduced them effective 1 January 2023.

The charges did come back lower than they had been. CBK's December 2022 announcement set out that maximum bank-to-wallet charges were cut by up to 61% on average, wallet-to-bank by up to 47% on average, and the charges banks themselves levy on transfers to mobile money by around 45%.

But "lower" is not "free", and the exact figure differs by bank. If you shuttle money between bank and wallet several times a month, that is a recurring cost worth measuring — and a reason to compare what different banks charge before you settle on one. Our bank account comparison is a starting point, and how to switch banks covers the mechanics if it turns out you are on the wrong one.

Nine ways to cut what you pay

1. Pay by till, not by cash. If the shop has a till number, use it. Buy Goods is free to you; withdrawing cash to pay the same shop is not.
2. Stop splitting large payments. The top band is flat. One transfer of KSh 200,000 costs one fee; four transfers of KSh 50,000 cost four fees.
3. Consolidate withdrawals. If you genuinely need cash, withdraw once a week rather than daily. Same total cash in hand, a fraction of the fees.
4. Send in one transaction, not several. Same logic as splitting: multiple small sends to the same person in one day usually cost more than one combined send.
5. Use the free bottom band deliberately. Small person-to-person transfers under the free threshold cost nothing at all.
6. Keep savings out of the wallet. Your wallet is for spending. Money you are not spending belongs somewhere it earns — see how money market funds work or run the numbers on our savings calculator. Money sitting in a wallet earns nothing and tempts you into fee-generating movement.
7. Cut the round trips. Every bank-to-wallet-to-cash journey is two or three fees. Decide where money is going before you start moving it.
8. Watch what an overdraft costs. Fuliza is charged daily and is easy to sit on without noticing — see Fuliza explained.
9. Ask the biller. Some organisations have both a paybill and a bank option, and one is cheaper for you. It costs one question to find out.

The limits that shape your costs

Knowing the ceilings helps you plan a payment rather than react to a rejection at the counter.

CBK announced on 8 September 2023 that it had approved raising the daily mobile money transaction limit from KSh 150,000 to a maximum of KSh 250,000, and the size of the mobile money wallet from KSh 300,000 to a maximum of KSh 500,000. Those increases took effect from 15 August 2023 and apply across the mobile money rails, including transactions between payment service providers, banks and other institutions that partner with mobile money providers.

For amounts beyond those limits, mobile money is the wrong tool and a bank transfer is usually both possible and cheaper. Sending money out of Kenya is a different market again with its own pricing — see sending money from Kenya abroad and compare the options on our money transfer comparison.

Your rights when it comes to charges

You are not simply a price-taker here. CBK issued Pricing Principles on 17 December 2020 as the guiding framework for setting tariffs and charges for mobile money services. They cover customer centricity, transparency and disclosure, fairness and equity, choice and competition, and affordability.

Transparency and disclosure is the one to hold providers to. You are entitled to know what a transaction will cost before you confirm it, and to get a statement showing what you were charged. If a charge appears that you cannot identify, raise it with the provider first, keep the reference number, and escalate to CBK if it is not resolved. The same principle underpins your dealings with bank agents, covered in agent banking and your rights.

If you send money to the wrong number, that is a separate process with genuine time pressure — act immediately and follow the steps in reversing a wrong M-Pesa transaction.

Frequently asked questions

Does the person receiving money pay anything? No. On a standard person-to-person transfer the sender carries the fee and the recipient receives the full amount. Receiving money is free.

Is it cheaper to send money in smaller amounts? No, and this is the most expensive misunderstanding in mobile money. Fees are banded and the top band is flat, so splitting a payment multiplies the fee without reducing anything. Send it once.

How much tax is in my M-Pesa fee? Excise duty of 15% on the fee itself, not on the amount you send. The Finance Act 2023 set this rate for both mobile money providers and banks from 1 July 2023. It is already included in the fee shown to you.

Is paying by till number really free? For the customer, yes, at any amount — the merchant pays the collection fee. Fuel stations are the main exception. This makes Buy Goods almost always cheaper for you than withdrawing cash to pay the same shop.

Are bank to M-Pesa transfers free? Not since 1 January 2023. CBK reintroduced those charges after waiving them during the pandemic, though at significantly reduced levels. The exact amount depends on your bank.

What is the most I can hold or send? The CBK-approved ceilings are a maximum daily mobile money transaction limit of KSh 250,000 and a maximum wallet size of KSh 500,000, in force since 15 August 2023. Providers may set their own lower limits within that.

Where do I check the current charges? Safaricom's published tariff is the authority on its own pricing, available on its website and through the M-Pesa menu on your phone. Airtel Money and T-Kash publish their own tariffs separately. Charges are revised from time to time, so check rather than assume.

Reviewed 1 September 2026. Charges, tariffs and limits change — confirm current figures with Safaricom, your bank or the Central Bank of Kenya before acting. This article is general information, not financial advice.