M-Pesa is a mobile-based money transfer service that has revolutionized the way Kenyans transact. It has become the go-to platform for sending and receiving money, paying bills, and buying goods and services.
However, with the increasing demand for the service, Safaricom, the company behind M-Pesa, has reviewed and adjusted the charges for using the platform.
Effective July 29, 2023, Safaricom introduced new M-Pesa charges that affect both sending and withdrawing money.
The new charges have elicited mixed reactions from Kenyans, with some expressing their displeasure while others see it as a necessary move to sustain the platform’s operations.
The charges vary depending on the amount of money being transacted and the method used to send or receive the money.
For instance, the minimum amount you can withdraw at an M-Pesa agent is Kshs. 50, while the maximum amount per transaction is Kshs. 150,000. To be able to transact, your Safaricom line and M-Pesa account must be active.
Despite the new charges, M-Pesa remains the most convenient and reliable way to transact in Kenya.
The platform has over 40 million users and continues to grow as more people embrace mobile money.
The new charges are aimed at ensuring the platform remains sustainable and can continue to provide quality services to its users.
New Mpesa Charges
Safaricom has recently updated its Mpesa charges for 2023. The new charges took effect on July 29th, 2023. Here are the details of the new Mpesa charges.
Transaction Fees
The transaction fees for sending money have increased from 12% to 15%. This means that customers will now pay more when sending money through Mpesa.
However, the new Mpesa pay bill charges are lower than the current rates by an average of 61%. These rates are much lower than the new Mpesa to Bank transactions which have also seen a cut by approximately 47%.
Withdrawal Fees
The withdrawal fees for Mpesa have also increased. Customers will now pay Ksh 35 for withdrawals between Ksh 100 and Ksh 2,500, up from Ksh 27.
The fees for withdrawals between Ksh 2,501 and Ksh 5,000 have increased from Ksh 28 to Ksh 45. Withdrawals between Ksh 5,001 and Ksh 10,000 will now attract a fee of Ksh 60, up from Ksh 49.
The charges for withdrawals between Ksh 10,001 and Ksh 35,000 have increased from Ksh 66 to Ksh 75.
Transfer Fees
The transfer fees for Mpesa have also seen an increase. Customers will now pay Ksh 45 for transfers between Ksh 101 and Ksh 500, up from Ksh 34.
The fees for transfers between Ksh 501 and Ksh 1,000 have increased from Ksh 67 to Ksh 90. Transfers between Ksh 1,001 and Ksh 1,500 will now attract a fee of Ksh 112, up from Ksh 112.
The charges for transfers between Ksh 1,501 and Ksh 2,500 have increased from Ksh 135 to Ksh 150.
Understanding Mpesa
What is Mpesa?
Mpesa is a mobile money transfer service that was launched in Kenya in 2007 by Safaricom, a leading telecommunications company.
The service allows users to send and receive money, pay bills, and buy goods and services using their mobile phones.
Mpesa has since expanded to other countries in Africa and Asia, becoming one of the most popular and widely used mobile money services in the world.
How Does Mpesa Work?
To use Mpesa, a user needs to register for the service at an Mpesa agent or Safaricom shop. After registration, the user can deposit money into their Mpesa account at an Mpesa agent or through a bank transfer.
Once the user has money in their Mpesa account, they can send money to another Mpesa user by entering the recipient’s phone number and the amount to be sent. The sender then confirms the transaction by entering their Mpesa PIN.
Mpesa also allows users to withdraw money from their account at an Mpesa agent or ATM, pay bills, and buy goods and services from participating merchants.
The service charges a fee for each transaction, which varies depending on the amount of money being sent or received and the type of transaction.
Overall, Mpesa has revolutionized the way people in Kenya and other countries conduct financial transactions.
The service has made it easier and more convenient for people to send and receive money, pay bills, and buy goods and services, especially for those who do not have access to traditional banking services.
Impact of New Charges
Effect on Users
The new M-Pesa charges that took effect in August 2023 have led to an increase in the cost of transactions for users.
The changes in the excise duty on goods and services have resulted in a 1% increase in transaction fees for amounts between Kshs. 1 and Kshs. 100.
For transactions between Kshs. 101 and Kshs. 5000, the fees have increased by 0.5%. Transactions between Kshs. 5001 and Kshs. 70,000 have seen a 0.2% increase in fees.
The increase in transaction fees has made it more expensive for users to transact using M-Pesa. This could lead to users exploring alternative payment methods that are more affordable.
However, M-Pesa remains one of the most widely used payment platforms in Kenya, and it is unlikely that users will abandon it altogether.
Effect on Businesses
The new M-Pesa charges have also had an impact on businesses that use the platform to receive payments.
The new charges for M-Pesa Paybill and Buy Goods transactions are lower than the current rates by an average of 61%.
This is good news for businesses that use the platform to receive payments as it will reduce their transaction costs.
However, the increase in transaction fees for other types of transactions could lead to businesses exploring alternative payment methods that are more affordable.
This could have a negative impact on M-Pesa’s market share in the long run.
Overall, the impact of the new M-Pesa charges on users and businesses will depend on the frequency and amount of transactions they make.
While the increase in transaction fees may be a concern for some users and businesses, M-Pesa remains a convenient and widely used payment platform in Kenya.
Comparing Old and New Charges
M-PESA has revised its Paybill and Buy Goods transaction charges, effective January 2023. The new M-PESA Paybill charges are lower than the current rates by an average of 61%.
These rates are much lower than the new M-PESA to Bank transactions which have also seen a revision upwards.
Below is a comparison of the old and new M-PESA Paybill and Buy Goods transaction charges:
| Transaction | Old Charges | New Charges |
|---|---|---|
| KES 0 – KES 100 | KES 0 | KES 0 |
| KES 101 – KES 500 | KES 5 | KES 2 |
| KES 501 – KES 1,000 | KES 10 | KES 5 |
| KES 1,001 – KES 1,500 | KES 15 | KES 10 |
| KES 1,501 – KES 2,500 | KES 25 | KES 15 |
| KES 2,501 – KES 3,500 | KES 40 | KES 20 |
| KES 3,501 – KES 5,000 | KES 55 | KES 25 |
| KES 5,001 – KES 7,500 | KES 75 | KES 30 |
| KES 7,501 – KES 10,000 | KES 85 | KES 35 |
| KES 10,001 – KES 15,000 | KES 95 | KES 45 |
| KES 15,001 – KES 20,000 | KES 100 | KES 50 |
| KES 20,001 – KES 35,000 | KES 110 | KES 60 |
| KES 35,001 – KES 50,000 | KES 135 | KES 70 |
| KES 50,001 – KES 70,000 | KES 165 | KES 85 |
| KES 70,001 – KES 150,000 | KES 200 | KES 100 |
The new M-PESA Buy Goods transaction charges will now be 0.5% of the transaction amount, with no upper limit. This is a reduction from the previous rate of 1.5% of the transaction amount.
The new M-PESA transaction charges will also apply to transactions between banks and mobile money wallets.
The transaction cost for sending money from a mobile money wallet to a bank account will be KES 15 for amounts up to KES 100 and KES 25 for amounts between KES 101 and KES 500.
For transactions above KES 500, the cost will be 1.5% of the transaction amount.
Overall, these new charges are expected to make it more affordable for Kenyans to transact using M-PESA Paybill and Buy Goods services.
How to Check Mpesa Charges
M-Pesa is a popular mobile money transfer service in Kenya. It is used by millions of Kenyans to send and receive money, pay bills, buy goods and services, and more.
As with any financial service, it is important to know the charges associated with using M-Pesa. Fortunately, checking M-Pesa charges is quick and easy.
Using the M-Pesa Cost Calculator
One way to check M-Pesa charges is to use the M-Pesa cost calculator on the My Safaricom App. This app is available for both Android and iOS devices and can be downloaded from the respective app stores.
To use the M-Pesa cost calculator, simply open the app and navigate to the M-Pesa section. From there, select the “Cost Calculator” option.
You will then be prompted to enter the amount you wish to send or withdraw. The app will then display the charges associated with that transaction.
Using USSD Codes
Another way to check M-Pesa charges is to use USSD codes. To check the charges for sending money, dial *234# and select the “M-Pesa Tariff” option.
You will then be prompted to enter the amount you wish to send and the recipient’s phone number. The USSD code will then display the charges associated with that transaction.
To check the charges for withdrawing money, dial *234# and select the “Withdraw Cash” option. You will then be prompted to enter the amount you wish to withdraw and the agent’s number.
The USSD code will then display the charges associated with that transaction.
Conclusion
Checking M-Pesa charges is important to avoid any surprises when using the service. By using the M-Pesa cost calculator or USSD codes, users can easily check the charges associated with their transactions.
Ways to Minimize Mpesa Charges
Mpesa is a popular mobile money service in Kenya that allows users to send and receive money, pay bills, and purchase goods and services using their mobile phones.
While Mpesa is convenient, it can also be expensive due to the fees charged for various transactions. Here are some ways to minimize Mpesa charges:
1. Withdraw in Bulk
If you want to shift to cash, make sure to withdraw in bulk. That way, you avoid the constant small fees paid when you withdraw small amounts using mobile money.
Use ATMs if withdrawing from a bank to avoid charges when sending to Mpesa, followed by withdrawal fees.
2. Bundle Transactions
To minimize the cumulative impact of Mpesa charges, consider bundling transactions within a specific range rather than conducting multiple small transactions.
Breaking down the new Mpesa withdrawal charges, it is best to categorize them based on transaction ranges.
3. Use Mpesa Paybill Services
Mpesa Paybill services are a convenient way to pay bills and make purchases without incurring transaction fees.
Starting January 2023, Safaricom has revised the charges customers attract while using Mpesa Paybill services.
This also comes as the Central Bank of Kenya re-introduces transaction costs for transactions between banks and mobile money wallets.
4. Check Mpesa Tariffs
Before making any Mpesa transaction, it is essential to check the Mpesa tariffs to avoid any unexpected charges.
The maximum account balance is Kshs.500,000, the maximum daily transaction value is Kshs.500,000, and the maximum amount per transaction is Kshs.150,000.
The minimum amount you can withdraw at an Mpesa Agent is Kshs.50.
By following these tips, users can minimize Mpesa charges and save money on their mobile money transactions.
