The verdict in three sentences
For a Kenyan merchant, the choice between M-Pesa Till (Buy Goods) and Paybill is not about which accepts payment — both do — but about the tiered merchant fees and how you pay out. Till is generally free for the customer and tiered for the merchant, while Paybill applies transaction bands that can be cheaper on certain amounts. The winner depends on your average transaction size and whether you need account references for reconciliation.
Till vs Paybill merchant fees compared
2026 order of magnitude figures (KES) for a Kenyan merchant; real bands vary by tariff.
| Transaction amount | Till (Buy Goods) fee (~) | Paybill fee (~) | Effective rate |
|---|---|---|---|
| KES 500 | ~KES 0 to 5 | ~KES 5 to 12 | ~0 to 2.4% |
| KES 2,500 | ~KES 20 to 30 | ~KES 25 to 40 | ~1.0 to 1.6% |
| KES 10,000 | ~KES 55 to 80 | ~KES 60 to 90 | ~0.6 to 0.9% |
| KES 35,000 | ~KES 100 to 130 | ~KES 110 to 150 | ~0.3 to 0.4% |
| KES 70,000 | ~KES 120 to 160 | ~KES 130 to 180 | ~0.2 to 0.3% |
The effective rate falls as the amount rises: high-ticket merchants pay a tiny percentage, while small tickets feel the fixed component more.
Collection vs payout: where the margin goes
Compare a full cycle — receive, then move funds out — to see where to act.
| Operation | Typical cost | Optimisation lever |
|---|---|---|
| Buy Goods (collection) | 0% to tiered | Use Till for retail |
| Paybill (collection + reference) | Banded | Use for invoices/bills |
| B2B / supplier payment | Tiered | Pay suppliers in-wallet |
| Withdraw to bank | Banded | Batch withdrawals |
A merchant who pays suppliers directly from the wallet avoids most cash-withdrawal costs entirely.
Mini case study
Wanjiru runs a hardware shop in Nairobi collecting KES 900,000/month via M-Pesa, mostly small tickets around KES 1,500. On Paybill her per-transaction fees ran near KES 18,000/month. Switching everyday retail to a Till (Buy Goods) with lower tiers on small amounts, she drops to about KES 14,000/month, and by paying 40% of suppliers directly from the wallet she avoids further withdrawal fees — landing near KES 11,000/month, saving over KES 84,000 per year. She keeps Paybill only for invoiced B2B orders that need a reference.
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FAQ
Should I use Till or Paybill for a retail shop?
Till (Buy Goods) is usually cheaper and simpler for face-to-face retail with many small tickets. Paybill is better when you need account references for invoices, rent or utility-style billing.
Why does the effective rate fall on larger amounts?
Because fees are tiered with a capped or slowly rising component, a KES 70,000 payment can cost under 0.3% while a KES 500 one feels a higher percentage. High-ticket merchants benefit most.
How do I cut my payout costs?
Batch withdrawals into larger amounts, pay suppliers directly from the wallet, and prefer bank transfer where it beats cash withdrawal. Avoid many small cash-outs.
Is Buy Goods free for my customers?
Yes, Buy Goods (Till) is typically free on the customer side, which reduces checkout friction. The tiered fee applies to you as the merchant.
Do I need both Till and Paybill?
Many merchants run a Till for retail and a Paybill for invoiced or reference-based payments. It keeps costs low while covering both use cases cleanly.
Let's talk about your project. We model your M-Pesa collection and payout flows to minimise fees. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
