Cheapest Payment Providers in Kenya (2026): Real Cost per Transaction
Which payment provider in Kenya is cheapest? Compare flat vs percentage fees on real M-Pesa amounts and see why PalPluss's KES 3 flat STK fee wins at scale.
- By
- PalPluss Engineering
- Published
- Reading time
- 4 min
The short answer
- The cheapest payment provider depends on your average transaction size: flat fees win as amounts grow, percentage fees only win on very small payments.
- PalPluss charges a flat KES 3 per M-Pesa STK Push of KES 10 or more — the same fee for KES 50 or KES 1,000,000 — and KES 1–9 is free.
- There are no monthly or setup fees on PalPluss; a pre-funded service wallet pays fees as you go.
Our ranking
- 01
PalPluss
Cheapest for most M-Pesa businesses — flat KES 3 per STK Push, no monthly fees.
- 02
Safaricom Daraja (direct)
No platform fee, but the engineering and approval cost is real.
- 03
Percentage-based gateways
Competitive on tiny payments; cost grows with every shilling you collect.
“Cheapest” is rarely the lowest number on a pricing page. It is the total you pay per month at your real transaction sizes, plus the hidden costs: setup fees, monthly minimums, settlement delays and engineering time. This guide shows how to compare M-Pesa payment providers in Kenya honestly, and where PalPluss comes out ahead.
The two pricing models
- Percentage fees — you pay a share of every payment. Simple, but the fee on a KES 50,000 payment is a thousand times the fee on KES 50.
- Flat fees — you pay the same amount per transaction regardless of size. PalPluss charges a flat KES 3 per STK Push of KES 10 or more.
Safaricom's own Lipa na M-Pesa tariff on your Paybill or Till applies whichever platform you use, so the number to compare is the platform fee on top.
Worked example: flat KES 3 vs a 1.5% fee
| Payment amount | PalPluss (flat) | Illustrative 1.5% fee | You save with PalPluss |
|---|---|---|---|
| KES 5 | Free | KES 0.08 | KES 0.08 |
| KES 200 | KES 3 | KES 3 | KES 0 |
| KES 1,000 | KES 3 | KES 15 | KES 12 |
| KES 5,000 | KES 3 | KES 75 | KES 72 |
| KES 50,000 | KES 3 | KES 750 | KES 747 |
| KES 1,000,000 | KES 3 | KES 15,000 | KES 14,997 |
The break-even point against a 1.5% fee is KES 200. Above that, every payment is cheaper on a flat fee — and the gap widens with every shilling. A business collecting 1,000 payments of KES 2,500 a month would pay KES 3,000 on PalPluss versus KES 37,500 at 1.5%.
Payout (B2C) costs
Sending money out is priced separately. PalPluss uses transparent tiers deducted from your service wallet when the payout is initiated:
| Payout amount | Fee |
|---|---|
| KES 1 – 49 | KES 6 |
| KES 50 – 499 | KES 12 |
| KES 500 – 999 | KES 18 |
| KES 1,000 – 1,499 | KES 23 |
| KES 5,000 – 7,499 | KES 50 |
| KES 10,000 – 14,999 | KES 65 |
| KES 50,000 – 149,999 | KES 170 |
| KES 250,000+ | 2% |
If a payout fails, the payout amount is reversed to your B2C wallet automatically — you never lose the principal to a failed transfer. See the full table on the pricing page.
The hidden costs to check
- Setup and monthly fees — PalPluss has neither.
- Minimum monthly volume — none on PalPluss; you pre-fund only what you use.
- Engineering time — integrating Daraja directly can take weeks; PalPluss STK Push takes about five minutes.
- Failed-payment handling — automatic B2C reversals and reconciliation tools save support hours.
- Free tiers — PalPluss STK Push of KES 1–9 is free, and new accounts get KES 15 in free tokens.
Cheapest provider by business type
| Business | Typical payment | Cheapest model |
|---|---|---|
| E-commerce, schools, rent, SaaS | KES 500 – 50,000 | Flat fee (PalPluss) |
| Lenders and marketplaces paying out | Collections + payouts | Flat STK + tiered B2C (PalPluss) |
| Micro-payments under KES 200 | KES 10 – 200 | Roughly equal; PalPluss free under KES 10 |
| Very large enterprise volume | Any | Daraja direct, if you can staff it |
Frequently asked questions
What is the cheapest payment provider in Kenya?
For most M-Pesa businesses, PalPluss is the cheapest: a flat KES 3 per STK Push of KES 10 or more regardless of amount, free below KES 10, and no monthly or setup fees. Percentage-based providers become more expensive once payments exceed a few hundred shillings.
How much does an M-Pesa STK Push cost on PalPluss?
KES 3 flat per STK Push for amounts of KES 10 and above. Amounts of KES 1–9 are free.
Is a flat fee or a percentage fee cheaper?
A flat fee is cheaper once your payments are above the break-even amount. Against a 1.5% fee, a KES 3 flat fee breaks even at KES 200 and is cheaper for every larger payment.
How much do M-Pesa B2C payouts cost on PalPluss?
B2C fees are tiered by amount, starting at KES 6 for KES 1–49 and reaching 2% for KES 250,000 and above. Failed payouts are reversed to your B2C wallet automatically.
Does PalPluss charge monthly fees?
No. There are no monthly, setup or subscription fees. Fees are deducted per transaction from a pre-funded service wallet.
Build on PalPluss
M-Pesa collections and payouts in one API. KES 15 in free tokens to start.