By The Weekly Vision Business Desk
In a move set to reshape small business transactions across Kenya, Safaricom has announced sharp reductions in M-PESA charges for key merchant services. The adjustments target Pochi la Biashara, Lipa na M-PESA Buy Goods, and Business Till transfers, aiming to make digital payments markedly more affordable and more competitive with cash, starting August 1, 2026.
Pochi la Biashara customers will enjoy three months of reduced transaction charges. From August 7, 2026, businesses using Lipa na M-PESA Buy Goods will benefit from higher free transaction limits and substantially lower costs when moving funds from Business Till accounts to M-PESA wallets or PayBills.
While framed as a customer-centric initiative, the tariff cuts represent a calculated strategic response to evolving market dynamics, regulatory pressure, and the need to protect M-PESA’s commanding position in Kenya’s digital economy.
For years, many micro, small and medium enterprises (MSMEs) have accepted M-PESA payments but preferred cash for subsequent transactions due to cumulative fees. A typical flow: customer payment into a till, transfer to a personal wallet, supplier payments, then cash withdrawals, often incurring multiple charges, eroding already slim margins. The new fee structure directly tackles that friction:
- Customer payments into Pochi la Biashara are now free up to KSh 200
- Buy Goods collections are free up to KSh 500, up from KSh 200
- Transfers from Business Till accounts to M-PESA wallets and PayBills have been cut by more than 50%
By lowering the cost of keeping money within the M-PESA ecosystem, Safaricom is incentivising businesses to minimise cash handling and fully embrace digital transactions.
The revisions explicitly reference alignment with Central Bank of Kenya (CBK) principles on customer-centricity, transparency, fairness, competition and affordability, a nod to the regulator that is telling. The CBK has intensified scrutiny of digital financial services pricing to promote inclusion and guard against monopolistic tendencies.
At the same time, competition is intensifying. Banks are expanding their digital offerings, while fintech players and alternative payment solutions chip away at merchant loyalty with aggressive pricing. By reducing fees, Safaricom is raising the bar for rivals seeking to displace M-PESA as the default platform for small businesses.
The move reflects a broader shift in Safaricom’s payments strategy: accepting lower per-transaction revenue in exchange for higher overall volumes and deeper ecosystem stickiness. Increased merchant adoption and transaction frequency could more than offset reduced margins, a classic play for network-dominant platforms where scale drives long-term value.
The three-month promotional window for Pochi la Biashara, running until October 31, 2026, also suggests a data-driven approach. Safaricom will likely monitor uptake, transaction growth and user behaviour before deciding on permanence.
Boost for MSMEs and Cash-Lite Goals
The changes are expected to deliver immediate relief to market traders, kiosks, boda boda operators, salons, restaurants, pharmacies and other cash-intensive small enterprises. Lower costs should enable merchants to retain more of their earnings while reducing risks associated with cash handling, such as theft and reconciliation errors.
Beyond individual businesses, the initiative supports Kenya’s national push toward a cash-lite economy. Greater digital transaction records could improve MSME access to formal credit and financial services, furthering broader inclusion objectives.
Kenya’s digital payments market is maturing rapidly, with providers moving beyond pure fee extraction toward competition based on affordability, convenience and ecosystem value. For Safaricom, the priority remains clear: reinforce M-PESA’s centrality in everyday commerce by making it the most economical and seamless option available.
