- Safaricom has raised the Lipa na M-PESA Buy Goods Kadogo threshold from KSh 200 to KSh 500.
- Merchants now keep the full amount on individual Buy Goods payments of up to KSh 500.
- Businesses also benefit from a 50% reduction in selected transactions made from an M-PESA Business Till.
- Scan to Pay and Tap to Pay offer customers faster ways to pay at participating outlets.
Imagine a customer walks into your shop and buys goods worth KSh 450.
They pay through your Lipa na M-PESA Till, and the full KSh 450 is credited to the business because the payment falls within the new KSh 500 Buy Goods Kadogo threshold.
Previously, the free collection threshold was KSh 200. Payments between KSh 201 and KSh 500 attracted a merchant collection charge.
Safaricom has now raised the threshold to KSh 500 under its Pata More campaign, allowing businesses to keep more of the money they receive from everyday sales.
What is the Buy Goods Kadogo threshold?
The Kadogo threshold is the amount below which a merchant does not pay a collection charge when receiving money through a Lipa na M-PESA Buy Goods Till.
With the new pricing, individual payments of up to KSh 500 are free for the merchant.
This is particularly useful for businesses that receive many small payments, including kiosks, restaurants, salons, pharmacies, mini-markets and clothing shops.
For example, if a business receives 50 separate payments of KSh 300 in one day, it collects KSh 15,000 without a merchant fee being deducted from those transactions.
The savings may appear small on one payment, but they can add up over weeks or months.
What are the current Buy Goods collection charges?
The revised pricing is structured as follows:
| Customer’s payment | Merchant collection charge |
|---|---|
| KSh 1–500 | Free |
| KSh 501–36,363 | 0.55% |
| Above KSh 36,363 | Capped at KSh 200 |
A business receiving KSh 500 therefore retains the full amount. A KSh 1,000 payment attracts a merchant charge of KSh 5.50.
For transactions above KSh 36,363, the collection charge is capped at KSh 200.
Business owners should note that the Kadogo benefit does not make every Buy Goods payment free. It only applies to individual collections of up to KSh 500.
Business Till transaction charges reduced
Safaricom has also reduced the cost of selected payments made from an M-PESA Business Till by up to 50%.
The reduction applies when a business transfers money from its Till to an M-PESA customer, a PayBill number or another Till.
For instance, sending between KSh 10,001 and KSh 15,000 from a Till to a customer now costs KSh 50, down from KSh 100.
For larger payments, the maximum charge has fallen from KSh 108 to KSh 54.
A KSh 10,000 payment from a Till to a PayBill now costs KSh 24, compared with KSh 48 previously.
These reductions can help businesses that use Till collections to pay suppliers, settle utility bills, refund customers or meet other operating expenses.
They may also reduce the need to withdraw money and make business payments in cash. Keeping transactions digital gives the business a record that can support bookkeeping and reconciliation.
Scan to Pay removes the need to type a Till number
Safaricom has introduced Scan to Pay to make payments at participating businesses faster.
Instead of entering a Till number manually, a customer scans the merchant’s QR code using the supported Safaricom application.
The business details appear on the customer’s phone for confirmation before the payment is authorised using an M-PESA PIN.
This can reduce errors caused by customers entering the wrong Till number. It can also speed up checkout in restaurants, supermarkets and other busy outlets.
Businesses can display their official QR codes at the counter or another clearly visible payment point.
How M-PESA Tap to Pay works
Tap to Pay offers another contactless payment option.
A customer with a compatible NFC-enabled smartphone taps it against the merchant’s supported device or chip. The transaction details appear on the customer’s screen for review before they enter their M-PESA PIN.
NFC, or Near Field Communication, is a short-range technology that allows compatible devices placed close together to exchange payment information.
According to Safaricom’s Tap to Pay guidance, customers need an active Safaricom line registered on M-PESA, a compatible NFC-enabled phone and the supported application.
The service is available at participating outlets with compatible devices.
Tap to Pay does not eliminate the need for a PIN. Customers should still confirm the merchant’s name and transaction amount before authorising a payment.
What should business owners do?
Businesses can benefit from the changes by displaying their Till number and official QR code clearly, updating the M-PESA Business App and checking whether their devices support Scan to Pay or Tap to Pay.
Employees should also confirm payments using official M-PESA messages or business payment tools instead of relying on a customer’s phone screen.
Regularly reconciling Till collections against sales can help identify errors and give the business a clearer picture of its daily cash flow.
For customers, the changes offer quicker and more convenient ways to pay.
For merchants, the higher KSh 500 Kadogo threshold, reduced Business Till charges and faster checkout options mean keeping more of what they earn while managing payments more efficiently.
