Lipa na I&M Bank, for businesses collecting payments
By Arnold Ochieng · I&M Bank Kenya hub · paybillke is an independent guide and is not affiliated with I&M Bank Kenya.
Lipa na I&M Bank lets a business collect M-PESA payments directly into its I&M account, using paybill 542542 with a shortcode I&M assigns you. Customers pay the same well-known paybill, and the reference routes the money to your business.
The account reference format
This is the part that makes it work, and the part to get right when you print it on an invoice. The account field takes your assigned code, then a #, then whatever narrative identifies the payer.
I&M's own example is 888888#house10: the shortcode, a hash, then the payer reference. For a landlord that might be the house number. For a school, the admission number. For a clinic, a patient or invoice number.
Print the whole string on the invoice exactly as the customer must type it. Every reconciliation problem in a collections setup starts with a customer typing the reference their own way.
Why collect into the bank instead of a till
Two real reasons.
Reconciliation. Money arrives in the bank account with a reference attached, so matching a payment to an invoice is a lookup rather than a guess. A personal till leaves you scrolling an SMS inbox.
Discipline. Takings that land in a bank account are harder to spend than takings sitting in a wallet on your phone. For a small business that is not a small thing.
The trade-off is that money in the bank has to be moved out to be spent as cash, and if you hold a business account that move is charged. See the charges page, and our M-PESA till hub for how tills compare.
What to ask I&M when you set it up
- Your assigned shortcode, and whether you can choose something memorable.
- Whether there is a merchant charge on collections, and if so what it is per transaction.
- How long setup takes, and what documents are needed.
- How settlement works, whether it is real time into the account or batched.
- What the reconciliation report looks like, and whether it exports.
- Whether it integrates with Business Connect or the API Gateway if you have a system to plug into.
A note on the charges you will be quoted
About this guide
Frequently asked
What is Lipa na I&M Bank?
A collection service that lets a business receive M-PESA payments directly into its I&M account using paybill 542542 with an assigned shortcode.
What account number do my customers enter?
Your assigned shortcode, a hash, then the payer reference. I&M's own example is 888888#house10.
Is it the same paybill as personal deposits?
Yes, 542542. The shortcode in the account field is what routes the money to your business.
Does it cost anything to collect?
Merchant terms are negotiated rather than published. Get the collection rate and the cost of moving funds out in writing before signing.