The £200 you sent to your mother has landed. It is sitting in her M-Pesa as roughly KES 41,000, and now she has to decide what to do with it. In July 2026 that decision changed a little, because nineteen Kenyan banks slashed what they charge to move money by PesaLink. Here is what that actually means for the family, and where it does not help.
The three doors
Once the money is in the wallet, she has three ways to spend it, and each has a different cost.
- Cash it out at an agent, so she is holding notes.
- Push it into her bank account.
- Leave it in the wallet and pay a shop, a bill, or a school directly from M-Pesa.
For years the default was door one. Sending money to a bank used to be slow and expensive, so the family cashed out and did the rest with paper money. That default is worth looking at again. Not because it was wrong then, but because two of the doors are cheaper now than they were, and the sender is often the one who has to point it out.
What changed in July
On 22 July 2026, PesaLink, the interbank switch owned by Kenya’s banks, announced a new price for nineteen of its member banks. Under the campaign name “Tuma Direct na Mbao”, transfers up to KES 1,000 are free, and transfers from KES 1,001 to KES 999,999 cost a flat KES 20. The old prices ran up to KES 250 on the top bands, depending on the bank.
The nineteen banks that have signed up: KCB, Absa, Stanbic, Diamond Trust, Prime, HFC, Access, Citibank, Commercial International Bank, Credit Bank, Ecobank, Guaranty Trust, Paramount, SBM, Victoria Commercial, Bank of Baroda, and the microfinance banks Faulu, Choice and Caritas.
Five of the biggest banks in the country have not signed up: Equity, Co-operative, Standard Chartered, NCBA, and I&M. On those five, PesaLink still runs the old ladder, and a KES 30,000 transfer can still cost the customer around KES 100 to KES 150.
That difference matters. The sentence “PesaLink is now cheaper than M-Pesa” is true if the family banks with one of the nineteen. On the five hold-outs it is not.
Where the PesaLink cut does not help
PesaLink moves money between two bank accounts. It does not start in an M-Pesa wallet. If the money is in your mother’s M-Pesa and she wants to send it to another person’s bank account, she has to move it into her own bank first. That first step has its own cost, and the cost depends on which bank she uses.
For most banks, the way to move money from an M-Pesa wallet into a bank account is to use the bank’s Paybill number inside M-Pesa. That charges Safaricom’s Paybill tariff for Business Bouquet accounts (the ones the customer pays for). On a KES 30,000 move, that is around KES 100. On smaller moves it is less.
A few banks have set up a free route the other way around. KCB, Equity and Co-op each have an app that will pull money from an M-Pesa balance into their own account for nothing, from either side. If the family already uses one of those apps, the first step is free.
So the real arithmetic for a wallet-to-someone-else’s-bank transfer is:
- Bank with the free pull, and recipient’s bank in the nineteen: the whole thing costs KES 20.
- Bank without the free pull, but recipient’s bank in the nineteen: the M-Pesa Paybill fee (around KES 100 on a large amount), plus KES 20 for PesaLink out.
- Recipient’s bank is one of the five hold-outs: the M-Pesa Paybill fee, plus whatever that bank’s old PesaLink tariff still says.
Compare that to a cash-out at the agent, which costs KES 309 at the top of the ladder no matter how big the transfer. On a large move to a bank, the PesaLink route usually wins now, in a way it did not last year. On a small move it depends.
What is the money actually for?
The verdict is not “PesaLink is cheaper full stop”. The right route depends on what the money is going to be spent on, and this is where the sender in London can help the family in Nairobi think it through.
If it is for rent, and the landlord takes a bank transfer. This is where the PesaLink cut helps most. If your mother’s bank pulls from M-Pesa for free (KCB, Equity, Co-op), and the landlord’s bank is one of the nineteen, the whole rent transfer now costs KES 20. That is a cleaner route than a cash-out at the agent plus a trip to hand over notes.
If it is for rent, and the landlord wants cash. Cash-out at the agent, and hand it over. KES 309 at the top of the ladder for a single withdrawal. There is no cheaper route if cash is the requirement, because the fee is paid at the moment paper money leaves the wallet.
If it is for the electricity, water, or school fees. Do not cash out and do not move it to a bank. Pay it straight from the wallet to the biller’s PayBill number. Kenya Power, Nairobi Water, most schools and most hospitals sit on Customer Bouquet paybills where the biller pays the fee, not the customer. The family pays nothing on top. Our piece on Kenyan mobile-money fees walks the PayBill lever in more detail.
If it is for shopping at the market, the pharmacy, or the corner shop. Same answer, in a different door. Pay with Buy Goods to the till number, and the customer pays nothing. The merchant absorbs the small fee. The route to Buy Goods is covered in the cashing out mobile money map.
If it is going straight to another person, not a business. M-Pesa’s send-to-another-wallet fee caps at KES 108, no matter the size of the transfer, up to KES 250,000 per go. That has not changed since 2023, and Safaricom has not announced a change for 2026. If the other person only uses M-Pesa, this is still the plainest route.
Ask before you send
The KES 20 PesaLink flat is a real cut, but only for the bank-to-bank leg, and only if the family banks with one of the nineteen. Getting the money out of the wallet in the first place, and paying a merchant or a bill from the wallet, has not changed.
Before you press send in London, ask what the money is going to be spent on. If it is a bank transfer to a landlord and both banks are in the group of nineteen, tell your mother she can push it through PesaLink for KES 20. If it is a shop, a school or a utility, tell her to pay it straight from the wallet. If it is cash she needs to hand over, the agent is still the answer, and the top-band fee is still KES 309.
A one-line note in the same message that carries the transfer is often enough to save the family a few hundred shillings on the arrival side. That is the small thing the sender can do.