M-Pesa – Complete Guide to the Mobile Phone Payment and Money Transfer Service

Recently M-Pesa has been getting all the major hype. It has expanded its popularity across the globe and its all for good reasons. Talking about solving a real-life situation, over a long period of time people around the globe have been trying to figure out ways to easily and efficiently send money to persons very far away in a matter of seconds. Though there are other money transfer systems, most common is the Western Union Money Transfer or through inter-bank wire transfer.

All these systems work very well but one of the major setbacks has always been the time it takes to complete these transfers, and this is where M-Pesa comes in. Just make sure you read this article thoroughly so you don’t miss out on any of M-Pesa’s many benefits.

What Exactly is M-Pesa? 

Simply defined, M-Pesa is a mobile money transfer application that offers payments and micro-financing services. Launched in 2007, “M” in M-Pesa stands for “Mobile” while “Pesa” means “money” in Swahili. This service is made available by Vodafone Group Plc and Kenya’s largest mobile network operator, Safaricom.

Many Kenyans are familiar with this application because having started off from the country, it is widely used in Kenya. However, it has since gone beyond Kenya to eleven other countries – some of which are South Africa, Tanzania, Ghana, India, Egypt, DRC, Mozambique, Albania, and Afghanistan.

The M-Pesa mobile app allows its users to carry out several financial-related activities, including making deposits and withdrawals, transferring money, paying for goods and services, and accessing credit and savings.

Truthfully speaking, M-Pesa has become the driving force behind the mobile revolution that has swept across the African continent.

How Does M-Pesa Work?

M-Pesa Registration

First, you have to own a registered Safaricom sim card. But that is not all; you will also need to register to be able to use it. The registration is free and can be done at M-PESA Agent outlet/Safaricom Retail Centre or Care Desk. All you will need to present is a copy of your valid identification document which can include any of the following: Kenyan National ID, Valid Kenyan Passport, Valid Foreign Passport, Kenya Military ID, or Kenyan Foreigner Certificate.

When the registration is complete, M-PESA will send a confirmation message to the customer informing him that the registration was a success. Also, a numeric start key which the customer will use to activate M-PESA on their phones will be sent.

Next, the customer will be required to fill an M-PESA Customer Registration Form and when he is done, the agent will confirm all the provided details and sign the registration form. The customer will also put his signature on the form and keep a copy as evidence that he has truly registered.

Meanwhile, M-PESA Agents are only allowed to register users with Kenyan Passport or National ID, As a result, customers who want to register using a foreign passport, military ID, and Foreigner Certificate for identification are required to visit a Safaricom shop or Care Desk.

Activation of M-Pesa Account

Following a successful registration, the customer will then activate M-PESA on his/her mobile phone using the 4-digit M-PESA PIN which was sent via SMS from M-PESA after registration. To activate your account, follow the guideline below.

On the SAFARICOM Menu:

1. Select the M-PESA menu

2. Select Activate or Wezesha. (The M-PESA menu allows for the use of either Swahili or English Language.)

3. Enter the ‘M-PESA PIN you received as an SMS.

4. Create your own Secret PIN, (a four-digit number) and confirm the secret PIN.

5. Enter the ID number on the identification document you used during registration.

6. Upon successful activation, the customer will receive a confirmation message with their account balance.

The customer will receive the M-PESA menu on their phone, under Safaricom, with the sub-menus below:

  • Send Money
  • Withdraw Cash
  • Buy Airtime
  • Loans and Savings
  • Lipa na M-PESA (pay for goods and services)
  • My Account

Depositing Money into Your Account

Once you have registered on M-Pesa, you can instantly load up some cash to your account. To do this, you will:

1. Visit an authorized M-PESA agent with your phone and original ID.

2. Hand the agent the amount you want to deposit

3. They will use their agent phone to send you e-money in exchange for cash.

4. Both you, the customer, and the agent will receive an SMS from M-PESA confirming the deposit transaction.

You could also top up your M-PESA account from your bank account. Your bank has a shortcode for mobile banking.

Sending Money Using M-Pesa

When you have money in your account you can easily send it to any other user of your choice. Just go to the M-Pesa menu on your phone then select the ‘Send money’ option, enter the phone number of the person you wish to send money to, and the amount you wish to send.

You will be prompted to enter your M-Pesa pin, as soon as you press Ok. Your transaction is processed and you receive a confirmation message including the name of the recipient. The recipient also receives an alerting text message confirming the amount and sender.

The sender will also receive a screen with the information he has entered above, confirm its correctness, and press Ok. A pop up with the name of the recipient will appear on the screen and the sender is required to confirm the name.

Paying Bills with M-Pesa

Another powerful resource is the fact that you can use M-Pesa to pay your bills. This made the whole process of payment of bills and buying fight tickets a lot simpler. Just the same way you send money to other users, with codes corresponding to a particular company you can send money to pay for particular services. Thanks to this, we can avoid long queues and save time for other things.


Withdrawing Money From M-Pesa

With money in your account as a registered customer, you can easily withdraw it into tangible cash. You will only need to visit an M-Pesa agent then:

1. Confirm that the agent has sufficient funds for your transaction.

2. Give the agent your phone number and show the original copy of your ID.

3. Go to your M-PESA menu, select ‘Withdraw Cash’.

4. Enter the Agent number, the amount you wish to withdraw, and your PIN.

5. You will receive a screen with the above transaction details. Confirm they are correct then press OK.

6. You and your agent will receive an SMS confirming the transaction.

7. The agent will then hand you the withdrawn amount and request you to sign a Log Book which is a record of M-PESA transactions done in that store.

Unregistered customers are also allowed to withdraw cash on M-Pesa. To do this, go to an M-PESA agent and:

1. Confirm the agent has sufficient funds for your transaction.

2. Present the SMS containing the M-PESA voucher number (notification confirming receipt of cash).

3. Give your phone number and show the original copy of your ID.

4. The agent will enter the ‘one-time code’ that is displayed on the customer’s SMS notification.

5. Both the agent and the customer will receive an SMS confirming the transaction.

6. The agent will give you your money and request you to sign the Logbook.

M-Pesa Rates and Charges

For M-Pesa users in Kenya, having answers to burning questions centering on the mobile money transfer service is as important as utilizing the service itself.

Questions like their charges for withdrawing from an agent, cost of transferring money to an un-registered Safaricom Number, and rates are always in the spotlight. For what it’s worth, charges, fees, tariffs, and rates on M-Pesa largely depend on the amount users send or withdraw.

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Below is a detailed statistics on M-Pesa transactional charges and rates.

M-pesa Charges  Withdrawal from M-PESA Agent

Min(KSHs.) Max(KSHs.) M-PESA Charges
1 49 N/A
50 100 10
101 500 27
501 1,000 28
1,001 1,500 28
1,501 2,500 28
2,501 3,500 50
3,501 5,000 67
5,001 7,500 84
7,501 10,000 112
10,001 15,000 162
15,001 20,000 180
20,001 35,000 191
35,001 50,000 270
50,001 150,000 300

Mpesa Charges – Transfer to Unregistered Users

Min(KSHs.) Max(KSHs.) M-PESA Charges
1 49 N/A
50 100 N/A
101 500 45
501 1,000 49
1,001 1,500 59
1,501 2,500 74
2,501 3,500 112
3,501 5,000 135
5,001 7,500 166
7,501 10,000 205
10,001 15,000 265
15,001 20,000 288
20,001 35,000 309
35,001 50,000 N/A
50,001 150,000 N/A

Mpesa Charges – Transfer to other M-PESA Users

Min(KSHs.) Max(KSHs.) M-PESA Charges
1 49 FREE
50 100 FREE
101 500 FREE
501 1,000 FREE
1,001 1,500 26
1,501 2,500 41
2,501 3,500 56
3,501 5,000 61
5,001 7,500 77
7,501 10,000 87
10,001 15,000 97
15,001 20,000 102
20,001 35,000 105
35,001 50,000 105
50,001 150,000 105

Mpesa Charges – Transfer to Other Mobile Money Users

Min(KSHs.) Max(KSHs.) M-PESA Charges
1 49 N/A
50 100 N/A
101 500 11
501 1,000 15
1,001 1,500 26
1,501 2,500 41
2,501 3,500 56
3,501 5,000 61
5,001 7,500 77
7,501 10,000 87
10,001 15,000 97
15,001 20,000 102
20,001 35,000 105
35,001 50,000 105
50,001 150,000 105

Mpesa Charges – ATM Withdrawal

Min(KSHs.) Max(KSHs.) M-PESA Charges
200 2,500 34
2,501 5,000 67
5,001 10,000 112
10,001 20,000 197


This is a recent addition to the M-Pesa menu. M-Shwari is a system that works with M-Pesa. Users have the ability to send money from their M-Pesa account into their M-Shwari account as savings. These savings can lead to the M-Shwari user receiving a loan once in a while.

M-Pesa is also linking up with banks and allows users to link-up their bank accounts and their M-Pesa account. Through this, people can now bank at the comfort of their seats. One can send or withdraw money from his or her bank account through his or her M-Pesa account.

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With the height this mobile money transfer platform has already reached, it is only bound to get higher. It is amazing how money transfer has been made easier, all I can say is that it is one of the best systems available and only the sky is the limit of what can be achieved from such fields.

Fast Facts About M-Pesa

1. Every user’s account can only hold a maximum amount of KSHs.300,000. They are not allowed to have more than this amount in their account.

2. Users are only allowed to carry out a maximum Daily Transaction value of KSHs.300,000 and a maximum per transaction limit of KSHs.150,000.

3. Users earn what is called Bonga points whenever they carry out a transaction on the mobile phone-based money transfer and financing service.

4. Users are barred from directly depositing money into another M-Pesa customer’s account at an agent outlet.

5. To carry out a transaction, you must have an active Safaricom line and M-PESA account.

6. Withdrawal of less than KSHs.50 at an M-PESA agent outlet is impossible.

PayPal Mobile Money Service with M-PESA

Early in 2020, M-Pesa and PayPal came into partnership with the aim of helping its users transact between the two widely-used platforms without stress. The PayPal Mobile Money Service with M-PESA is a money transfer service made available by TransferTo in partnership with Safaricom and PayPal.

To be able to use this service, you must have an eligible M-PESA account and also a Kenyan PayPal account. That simply means that your nationality should be set to “Kenyan” in your Paypal account otherwise this service will not work.

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How to Link Your PayPal and MPESA Accounts

When registering to use the service, you’ll link both accounts and by so doing, you will be able to move your money from one to the other. This is how to do it:

1. Go to www.paypal-mobilemoney.com/m-pesa

2. Log into your Kenyan PayPal account.

3. Agree to TransferTo’s terms and conditions for using the service.

4. Add the Safaricom MPESA number you’d like to link to the PayPal account.

5. You will receive a verification code on your Safaricom line via SMS text. Key in this code to complete the link.

How To Top Up Your PayPal Account Using Your M-PESA Balance

1. After completing the registration, click “Top Up”.

2. Enter the amount you would like to top up in USD and click “Calculate” to get the equivalent amount converted in KES. This is the KES amount you need to transfer from your M-PESA account. The exchange rate used will be displayed on the same page.

3. Go to your M-PESA menu and select “Lipa na M-PESA” then the “Pay Bill” option.

4. Enter Business Number 800088.

5. Enter your phone number as the Account Number.

6. Enter your M-PESA PIN and click “Send”.

7. Use your newly topped up balance to easily and more securely shop online or send payments with PayPal.

Although Top Ups to your PayPal account will generally be processed in real-time, it is likely to take up to 4 hours. If your PayPal balance is not in USD, you will need to log in to your PayPal account to confirm the top-up request.

Withdrawing Money From PayPal to M-PESA Account

1. After completing the registration, click “Withdraw”.

2. Your available balance will be displayed. You will only be able to withdraw money up to the available USD balance shown in your PayPal account. If you hold a balance in your PayPal account in a different currency, please log in to your PayPal account at paypal.com/ke and convert the money into USD.

3. Enter the amount you would like to withdraw from your PayPal account in USD.

4. You will be redirected to a page showing the amount to be received in KES, the exchange rate used for the currency conversion, and the estimated transaction processing time.

5. Confirm and complete the withdrawal of funds.

Afte the transaction has been confirmed, it will take between 2 hours to 3 days to process a withdrawal from your PayPal account to your M-PESA account, depending on the transaction value. The estimated time will be shown to you before you confirm the transaction.

Fadamana U
Fadamana U
Fadamana has built up professional writing and editing experience over the years in report and technical articles, informational and creative content across various topic specialties. Outside work, I like to binge on new movies.


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