Understanding M-PESA Transaction Costs

M-PESA transaction costs may look small, but over time they can affect the profit of a small business.

Record charges as expenses

If the business pays M-PESA charges, those costs should be recorded as business expenses. Otherwise, profit may look higher than it really is.

Separate charges from sales

A payment received from a customer is income. A transaction charge is a cost. Keep those figures separate in your records.

Review costs monthly

At the end of each month, check how much the business spent on transaction charges. This can help you understand the real cost of payment collection.

Include costs in pricing decisions

If charges are significant, they should be considered when setting prices, delivery fees or minimum order amounts.

Good expense tracking gives a more accurate view of real profit.