M-Pesa Paybill Charges and Limits (2025)

Created: 18 Jul 2025   Updated: 18 Jul 2025

What is M-Pesa Paybill?

M-Pesa Paybill is a dedicated virtual account system that enables businesses to collect payments from M-Pesa users seamlessly. Unlike regular person-to-person transfers, Paybill provides businesses with a unique 7-9 digit number that customers use to make structured payments. The system allows businesses to track payments more effectively by requiring customers to enter both a business number and an account number, making reconciliation and record-keeping significantly easier

Key Features and Benefits

For Businesses

M-Pesa Paybill offers numerous advantages for organizations:

Operational Benefits:

  • Real-time payment processing - Receive payments instantly, 24/7
  • Automated reconciliation - Account numbers help match payments to specific customers or invoices
  • Reduced administrative costs - Lower transaction costs compared to traditional banking
  • Enhanced cash flow - Immediate access to funds improves business liquidity
  • Comprehensive reporting - Access to detailed transaction reports and statements

Security and Reliability:

  • Secure transactions - PIN-protected payments ensure authorized transactions only
  • Real-time notifications - Both businesses and customers receive instant transaction confirmations
  • Regulated service - Overseen by the Central Bank of Kenya for consumer protection

For Customers

Customers benefit from the convenience and accessibility of Paybill services:

  • Universal accessibility - Available to all registered M-Pesa users
  • Multi-channel access - Pay via USSD, mobile app, or SIM toolkit
  • 24/7 availability - Make payments anytime, anywhere
  • Transaction security - PIN authentication and SMS confirmations

How to Use M-Pesa Paybill: Step-by-Step Guide

Method 1: Using USSD (*334#)

  1. Dial *334# from your registered M-Pesa line
  2. Select "Lipa na M-Pesa"
  3. Choose "Pay Bill"
  4. Enter the Business Number (provided by the organization)
  5. Enter the Account Number (your reference number, student ID, invoice number, etc.)
  6. Enter the Amount you wish to pay
  7. Enter your M-Pesa PIN to authorize the transaction
  8. Confirm all details and press "OK"
  9. You'll receive an SMS confirmation once the transaction is complete

Method 2: Using M-Pesa Mobile App

  1. Launch the M-Pesa App on your smartphone
  2. Select "Pay" from the main menu
  3. Choose "Paybill"
  4. Enter the Business Number
  5. Input the Account Number
  6. Enter the Amount and complete using your M-Pesa PIN

Method 3: Using SIM Toolkit

  1. Go to your phone's M-Pesa menu
  2. Select "Lipa Na M-Pesa"
  3. Choose "Paybill"
  4. Enter the required details (Business Number, Account Number, Amount)
  5. Complete the transaction with your M-Pesa PIN

Paybill Charges and Tariff Structures

M-Pesa Paybill operates under three distinct tariff models, with costs varying based on the business's chosen structure:

1. Mgao Tariff (Shared Cost)

In this model, transaction charges are split between customer and business:

Transaction Amount Customer Pays Business Pays Total Charge
KSh 1 - 49 0 0 0
KSh 50 - 100 0 0 0
KSh 101 - 500 5 0 5
KSh 501 - 1,000 10 0 10
KSh 1,001 - 1,500 10 5 15
KSh 1,501 - 2,500 13 7 20
KSh 35,001 - 50,000 24 84 108
KSh 50,001 - 250,000 24 84 108

2. Business Bouquet Tariff (Zero Cost to Business)

The customer bears the full cost of the transaction.

3. Customer Bouquet Tariff (Zero Cost to Customer)

The business absorbs all transaction costs.

Most businesses opt for the Business Bouquet model, passing transaction costs to customers.

How to Apply for M-Pesa Paybill

Application Requirements

The requirements vary based on business type:

For Individuals (Buy Goods Only)

  • Duly filled application form and terms & conditions
  • Copy of National ID, Passport, or Military ID
  • KRA PIN Certificate (for bank settlement)
  • Bank details or cancelled cheque

For Sole Proprietors

  • Application form and terms & conditions
  • Business Certificate of Registration or Business Permit
  • Owner's identification documents
  • Individual KRA PIN certificate
  • Bank details as per certificate of registration

For Limited Liability Companies

  • Certificate of Incorporation
  • M-Pesa Authorization Form signed by at least two directors
  • Company and directors' KRA PIN certificates
  • Copy of CR12 (valid for 90 days)
  • Directors' and shareholders' identification documents
  • Organization bank details

Application Process

  1. Visit the Application Portal: Go to https://m-pesaforbusiness.co.ke/
  2. Download Required Forms: Get the application form, tariff guide, and terms & conditions
  3. Complete Documentation: Fill all forms accurately and gather required documents
  4. Submit Application: Submit online or visit a Safaricom shop
  5. Wait for Approval: Processing typically takes 24-72 hours for complete applications

Paybill vs Till Number: Key Differences

Understanding the distinction between Paybill and Till Number (Buy Goods) is crucial for choosing the right solution:

Feature Paybill Till Number
Business Type Formal/Service-based businesses Retail/Informal businesses
Account Number Required (enables tracking) Not required
Best For Bills, subscriptions, donations Over-the-counter sales
Reconciliation Detailed with account numbers Basic transaction details
Settlement Bank account or M-Pesa Real-time to M-Pesa wallet
Number Format 7-9 digits 5-6 digits

Common Use Cases and Examples

M-Pesa Paybill serves various business sectors:

Educational Institutions

  • Schools use Paybill for fee collection, with student numbers as account references
  • Universities implement bulk payment systems for tuition and other charges

Healthcare Providers

  • Hospitals collect patient payments using medical record numbers
  • SHIF uses Paybill number 222222 for contribution payments

Financial Services

  • Banks use Paybill for account deposits and loan repayments
  • SACCOs implement member contribution collection systems

Utilities and Government Services

  • Kenya Power for electricity bill payments
  • Water companies for monthly billing
  • Government agencies for license and permit fees

Troubleshooting Common Issues

Transaction Failures

Common Problems and Solutions:

Issue Cause Solution
Transaction not completing Network issues or insufficient balance Check balance and retry with stable network
Wrong business number Incorrect Paybill number entered Verify the correct business number
Account number rejection Invalid format or missing reference Confirm proper account number format with business
PIN rejection Incorrect PIN or blocked account Reset PIN or contact customer care

System Outages

Safaricom occasionally experiences technical issues affecting Paybill services:

  • Monitor Safaricom's official channels for service updates
  • Use alternative payment methods during outages
  • Contact customer support for transaction reversals if needed