Why are some M-PESA paybills free (zero-rated)?

Government services on eCitizen (paybill 206206) and the consolidated government paybill 222222 are zero-rated — Safaricom waives the customer fee on these as part of agreements with the government to encourage digital payment of taxes and government services.

M-PESA tariff 2026 explained: every change from 2025 and why

Q: Did M-PESA fees change in 2026?

No major changes. The 2026 M-PESA tariff is largely a hold of the 2025 schedule. KRA excise duty remains at 15%. The bracket structure for Send Money, Paybill, and Withdraw at Agent is unchanged.

Q: Will M-PESA fees go up?

Tariff reviews happen periodically when CBK approves changes. The biggest fee mover is KRA excise duty — set in the Finance Act each year. It rose from 12% to 15% in 2023 and has held since. Future Finance Act changes are the main source of fee risk.

The M-PESA tariff is the published fee schedule that Safaricom — under approval from the Central Bank of Kenya — applies to every M-PESA transaction. The 2026 tariff went into effect at the start of the year and is largely a hold of 2025 levels. This guide explains the structure, what changed, what didn't, and the underlying drivers worth watching for any future moves.

How the M-PESA tariff is structured

The M-PESA tariff has three components stacked together:

Safaricom transaction fee. The base fee Safaricom charges to operate the transaction — covers the network, the agent network, the back-office settlement, and the regulatory cost.
KRA excise duty. 15% of the transaction fee, collected by Safaricom and remitted to KRA. This is set in the Finance Act, not by Safaricom.
(Some merchants) merchant fees. For paybill, the receiving merchant pays a settlement fee — invisible to the customer. For Buy Goods, the customer pays nothing; the merchant absorbs the fee.

When you see a fee on your M-PESA SMS, it's the bundled total — Safaricom fee + excise. You don't see them separately.

2025 vs 2026 — side by side

The 2026 tariff is mostly a hold. Here's a comparison of representative brackets:

Transaction type / amount	2025 fee	2026 fee	Change
Send Money — KES 1,000	13	13	—
Send Money — KES 5,000	57	57	—
Send Money — KES 50,000	108	108	—
Paybill — KES 1,000	10	10	—
Paybill — KES 10,000	48	48	—
Paybill — KES 100,000	105	105	—
Withdraw — KES 5,000	69	69	—
Withdraw — KES 50,000	278	278	—
Buy Goods — any amount	0	0	—

For practical purposes, what you paid for an M-PESA transaction in 2025 is what you pay in 2026. The free thresholds (KES 1-100 for Send Money and Paybill) carry forward.

The role of KRA excise duty

Excise duty on M-PESA fees has been the single biggest mover in the tariff over the last five years. The history:

2018: 10% excise duty on M-PESA transaction fees (under the 2018 Finance Act)
2021: 12% (Finance Act 2021)
2023: Raised to 15% (Finance Act 2023) — held in 2024, 2025, 2026

Each duty hike directly increases customer fees because Safaricom passes the duty through. The 2023 hike from 12% to 15% added KES 3-9 to most brackets immediately — small per transaction, large in aggregate across millions of daily transactions.

Future Finance Acts (typically tabled in June each year and effective July) are the main source of tariff risk. Watch the budget statement for any changes to excise duty on mobile money services.

Why some paybills are free (zero-rated)

Not every M-PESA paybill charges the customer. Some are zero-rated under arrangements between Safaricom and the receiving institution:

eCitizen (paybill 206206) — government services, business permits, civil registration. Zero-rated to encourage digital payment of government services.
Government services consolidated paybill (222222) — covers KRA tax payments via PRN, NSSF, NHIF/SHA, HELB, KMTC, KIMC, and more. Zero-rated for tax collection efficiency.
Some KRA-specific paybills — depending on the tax type, KRA (paybill 572572) may be zero-rated. Confirm with KRA before sending.
Selected emergency / charity paybills — the Kenya Red Cross paybill and certain humanitarian appeals are sometimes zero-rated for major events.

Zero-rated paybills aren't a tariff change — they're a per-paybill arrangement. Most regular paybills (utilities, banks, schools, churches) charge the standard customer paybill fee.

Why Buy Goods is free for customers

In 2018, Safaricom unilaterally waived the customer fee on Lipa na M-PESA Buy Goods — the till-number product used by supermarkets, restaurants, and retail. The merchant pays a settlement fee (typically 0.5-1% of the transaction) instead.

The strategic logic was straightforward: drive merchant adoption by removing customer friction at point-of-sale. It worked — the number of active till numbers grew from roughly 200,000 in 2018 to over 1 million by 2024. Customer-side, Buy Goods has remained free through 2026.

For customers, this creates a real arbitrage: when paying a merchant, prefer Buy Goods over Paybill if both are accepted. The customer experience is identical; the fee is zero vs. KES 5-105 depending on amount.

Why the bracket structure exists

M-PESA could have used a percentage fee (e.g., 1% of transaction value). Instead, it uses tiered brackets with flat fees within each tier. The reason:

Predictability for users. A user knows that any KES 1,001-1,500 paybill costs exactly KES 15 — no need to do per-transaction math.
Cap on high-value transactions. The maximum fee on a KES 250,000 send is KES 108 — about 0.04%. A pure 1% would be KES 2,500. Brackets cap the cost on big transactions.
Free thresholds for low-value transactions. The KES 1-100 free bracket subsidises tiny transactions (paying a boda boda fare, a chai vendor) which otherwise wouldn't be economically viable.

The trade-off: bracket boundaries create cliff effects. Sending KES 1,000 costs KES 13; sending KES 1,001 costs KES 23. Right at the bracket boundary, a single shilling change can almost double the fee.

M-PESA tariff vs Airtel Money vs T-Kash

Each Kenyan mobile money network publishes its own tariff. Quick comparison at a typical amount (KES 5,000 paybill):

M-PESA: KES 34
Airtel Money: typically KES 25-30 (slightly cheaper for many brackets)
T-Kash: typically comparable to M-PESA

Airtel Money has historically priced below M-PESA on most paybill brackets to attract users. T-Kash (Telkom) has had less consistent pricing. Most paybills now accept all three networks via interoperability — see our paybill interoperability guide.

What to watch for future tariff changes

Three signals worth monitoring:

Finance Act (June each year). Any change to excise duty on mobile money services flows through to fees within 1-2 months. Watch the Treasury's budget statement.
CBK announcements on mobile money. CBK approves Safaricom's tariff schedule. Any major restructure (e.g., a return to customer fees on Buy Goods, or a change to the bracket structure) goes through CBK.
Safaricom investor communications. Half-year and full-year results briefings often signal tariff direction. If Safaricom mentions "tariff rationalisation", expect changes within 3-6 months.

Where the published tariff actually lives

Three sources for the official tariff:

Safaricom M-PESA rates page — primary source, updated when changes happen
The M-PESA app — has an in-app rates calculator
paybillke calculator — mirrors the official rates and is updated as Safaricom updates

If you ever see a discrepancy between two sources, trust safaricom.co.ke — it's the only authoritative one. Third-party calculators (including ours) can lag a tariff change by days.

FAQ

Did M-PESA fees change in 2026?

No major changes. The 2026 schedule is largely a hold of the 2025 schedule. KRA excise duty remains at 15%. Bracket structure is unchanged.

Why are some paybills free?

Zero-rated paybills are negotiated arrangements between Safaricom and the receiving institution — typically government services on eCitizen and the consolidated government paybill 222222. Most paybills charge the standard customer fee.

Will M-PESA fees go up in 2026?

Probably not, barring an unexpected Finance Act change. The 2025 Finance Act held excise duty at 15%. The 2026 budget process will be the next catalyst to watch.

Is Airtel Money really cheaper?

Slightly. Airtel typically prices 10-25% below M-PESA on paybill transactions. The catch is M-PESA's much larger network — more agents, better merchant acceptance.

Will Buy Goods stay free?

Almost certainly yes for 2026. Reverting to customer fees on Buy Goods would be highly unpopular and would likely face CBK scrutiny. Safaricom has consistently signalled commitment to keeping it free.