How do people in Kenya pay online?
Most Kenyans pay with M-PESA. Central Bank of Kenya statistics show 95.31 million registered mobile money accounts in August 2026, served by 563,605 active agents who handled KES 761.13 billion of cash-in and cash-out that month. Safaricom reported 40.99 million one-month active M-PESA customers for the year to March 2026 and 3.1 million merchants.
Online, M-PESA works in two ways. With M-Pesa Express, often called STK Push, the merchant sends a request and the customer’s phone shows a prompt with the amount already filled in; the customer enters their PIN and the result reaches the merchant by callback. With Paybill or Till, the customer enters the merchant’s business number and amount in the M-PESA menu or app and confirms with the PIN. Safaricom caps payments at KES 250,000 per transaction and KES 500,000 a day.
Banks sit alongside mobile money. Visa and Mastercard cards are accepted online, and Pesalink, run by a subsidiary of the Kenya Bankers Association, moves up to KES 999,999 between bank accounts in near real time.
What rules shape online payments in Kenya?
Foreign digital sellers charge VAT. A non-resident that supplies electronic services to recipients in Kenya must register for VAT and charge the standard 16% rate, on sales to consumers since April 2021 and to businesses since 1 July 2022. Income from Kenya is also taxed. The Tax Laws (Amendment) Act 2024, effective 27 December 2024, repealed the 1.5% digital service tax and replaced it with a Significant Economic Presence tax at an effective rate of 3% of turnover. The Finance Act 2025 extended it to all income non-residents earn from services provided over the internet and removed the KES 5 million turnover exemption.
Payment fees now carry VAT. Under the Finance Act 2026, most of which took effect on 1 July 2026, payment processing, cash handling and fees for digital payment platforms moved from exempt to the standard VAT rate. Interchange and merchant service fees on card transactions are also treated as management or professional fees for withholding tax.
Online agreements have set disclosure rules. Under the Consumer Protection Act 2012, now Cap. 501, for internet agreements above a prescribed amount, a supplier must disclose prescribed information before an internet agreement is made, give the customer an express chance to accept, decline or correct errors, and then send a written copy. If it does not, the customer can cancel until seven days after receiving the copy. On cancellation the supplier must refund the payment, and a customer who paid by credit card and was not refunded in time can ask the card issuer to reverse the charge.
Customer data has its own rules. The Data Protection Act 2019 requires data controllers and processors to register with the Office of the Data Protection Commissioner unless they are small businesses, with annual turnover below KES 5 million and fewer than 10 employees, outside the sectors that must always register. Transfers of personal data out of Kenya need proof of appropriate safeguards or another legal basis.
How would Omno route payments in Kenya?
Omno is built for markets like this: a merchant connects once and sets routing rules per method, currency and customer group. In Kenya:
- M-PESA pay-ins would go to a provider that holds an M-PESA connection for the merchant’s paybill or till, with the order pending until the callback arrives.
- M-PESA payouts would go through a provider with a B2C shortcode, with a unique reference so a retry cannot pay twice.
- Card pay-ins can be routed by BIN, with cascading to the next provider in the rule if one is unavailable or rejects the request.
- PSP eligibility rules can keep each customer group on providers that support its method and payout type.
Webhooks would report the final status of every payment, the record a back office should trust before shipping an order, and the routing-decision log would show which provider handled each payment and why.
What should merchants plan for?
Plan for M-PESA first, with STK Push as the default and Paybill as a fallback.
Plan for asynchronous results. An STK prompt can be cancelled or ignored, so orders need a pending state and callback-driven confirmation. Payments above KES 250,000 need to be split or sent by bank transfer.
Plan for tax at the payment layer. VAT registration for digital sales, SEP tax on Kenyan income and VAT on payment fees all need a clean record of every payment, refund and fee by provider.
Plan for online checkout rules. Show the prescribed information before the order, let the customer confirm or correct it, and send a written copy, so customers do not gain a right to cancel.