Why Charges at Petrol Station via M-PESA Till Numbers Often Costs More

Many Kenyan motorists have noticed a small but consistent difference when paying for fuel using M-PESA compared to cash. In most cases, filling up with mobile money ends up costing slightly more — a situation that has raised questions among drivers.

While M-PESA Buy Goods payments are generally free for customers, fuel stations are a special case where indirect costs come into play.

Why Fuel Rates Are Different

At petrol stations, customers pay using Lipa na M-PESA Buy Goods (Till Numbers) rather than standard person-to-person transfers. These payments are classified as merchant transactions, meaning the business — not the customer — is charged a service fee by Safaricom.

For Buy Goods payments above KSh 200, Safaricom deducts up to 0.55 percent per transaction, capped at KSh 200, directly from the petrol station’s settlement. The customer’s M-PESA balance is not charged any extra fee at the time of payment.

Thin Profit Margins Force Price Adjustments

Fuel retailing is a low-margin business. Petrol stations typically earn only a few shillings per litre after factoring in taxes, transport, and operational costs.

Because of this, many fuel dealers quietly build the M-PESA transaction cost into the pump price or apply a slightly higher rate for digital payments. This helps them recover the merchant fee without listing it as a separate charge.

As a result, motorists paying in cash may notice that their total bill is slightly lower, even though no extra M-PESA fee is shown on the receipt.

Why Safaricom Is Not Charging Customers Directly

Safaricom does not deduct any additional fee from a customer’s wallet when paying for fuel via a till number. Instead, the transaction cost is borne by the petrol station.

To remain profitable, fuel stations often pass this cost on indirectly through pricing, making mobile payments appear more expensive compared to cash.

Regulation and Compliance Considerations

Fuel prices in Kenya are regulated by the Energy and Petroleum Regulatory Authority (EPRA), which sets maximum pump prices. However, the rules do not prevent stations from factoring in payment-related costs, as long as the displayed price is the final amount paid by the customer.

This gives petrol stations room to stay compliant while recovering digital transaction expenses.

Beyond M-PESA fees, fuel dealers also face heavy compliance costs, including electronic tax systems, real-time reporting to the Kenya Revenue Authority, licensing fees, and frequent regulatory audits.

While mobile payments improve transparency and reduce cash-handling risks, they also introduce system and settlement costs that businesses must absorb.

The Trade-Off With Digital Payments

Accepting M-PESA offers clear benefits to fuel stations — faster service, reduced theft risk, and lower cash management challenges. However, for high-volume fuel sales with slim margins, these benefits do not always fully offset merchant service fees.

The gap often shows up in pricing, especially for customers using mobile payments.

How This Compares Globally

Kenya is not unique in this practice. In countries such as the United States, parts of Europe, South Africa, and Nigeria, fuel stations sometimes charge slightly higher prices for card or mobile payments.

These differences are mainly meant to cover transaction processing fees charged by banks and payment networks. As long as pricing is transparent and complies with consumer laws, the practice is generally legal.

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