3 Local Payment Gateways Every Kenyan Online Store Should Offer

For any online store in Kenya, choosing the right payment gateways isn’t just about making sales—it’s about building trust, reducing cart abandonment, boosting conversion, and supporting local customer preferences. We as IntelliMinds Technologies believe that offering local, familiar payment options is one of the strongest levers you have to improve your store’s performance. In this post, we’ll look at three top local gateways, why they matter, and how to integrate them properly.

Why Local Payment Gateways Matter in Kenya

Kenyan online shoppers expect convenience. According to recent trends:

• Mobile money (especially M-Pesa) remains dominant as a trusted payment method.

• Security, ease of use, and transparent charges are key concerns that dictate whether a customer goes through with a purchase.

• If your checkout doesn’t include the payment options customers already use, you risk cart abandonment and losing sales to competitors who do.

So, integrating local payment gateways isn’t optional, it’s essential.

1. M-Pesa (Lipa Na M-Pesa, STK Push, Till / PayBill)

What it is

M-Pesa is Kenya’s largest mobile money service, and its “Lipa Na M-Pesa” offerings allow customers to pay for goods & services via mobile phone. They include STK Push, Till Number, and PayBill integrations.

Why you should offer it

M-Pesa enjoys very high familiarity and trust among Kenyan shoppers. It provides instant payment confirmation—especially via STK push—and offers lower friction in checkout. For many buyers, entering mobile money payment details is far more convenient than entering card details.

Important details & costs

• Businesses are charged about 0.55% of the transaction for Buy Goods (Till) payments, capped for higher amounts.
• For transactions above certain amounts or at “fuel stations,” there may be different charges.
• Safaricom’s API (Daraja) allows for STK Push integration and real-time notifications, though integration involves development effort, testing, and compliance with Safaricom’s requirements.

Pros & Cons

Pros: M-Pesa is highly trusted and used by many Kenyans. It offers low checkout friction for mobile users and is widely accepted across the country.

Cons: Implementation can be rigorous because of documentation, signup steps, and required certificates. Some transaction fee caps might affect margins, especially for low-value items. In addition, not all customers are comfortable using mobile money, and occasional network issues can cause payment delays.

2. Pesapal

What it is

Pesapal is a Kenyan payment service provider (PSP) that supports mobile money, card payments, online invoicing, and POS / payment link options. It recently received formal licensing to operate as a Payment Gateway / PSP in Kenya under the national regulations.

Why you should offer it

Pesapal offers multiple payment options—cards plus mobile money—so you can capture more customers. It is a recognised name in Kenya, and many customers already trust it. Features like payment links allow stores without full e-commerce infrastructure to accept payments.

Key Details & Costs

• Pesapal is authorised by the Central Bank of Kenya to operate as a PSP, giving merchants extra confidence.
• Integration is flexible, with plugins, APIs, and POS solutions available.
• The Pesapal mobile app allows customers to pay bills, buy tickets, and top up airtime using card or mobile money. 

Pros & Cons

Pros: Pesapal supports versatile payment methods, combining card and mobile money options. Its status as a licensed PSP ensures regulatory compliance, and it offers strong support for non-store payments like payment links and POS systems.

Cons: Card payment fees can be higher, and some customers may hesitate to enter card details online. Integration may require more effort depending on your platform. Settlement times for card payments can also lag behind the instant transfers common with mobile money.

3. Paystack

What it is

Paystack is a payment gateway that accepts local cards, mobile money, and even international payments, often used by startups and SMEs. It supports KES transactions and provides SDKs/APIs for easy integration. 

Why you should offer it

Paystack is especially good for stores with customers who prefer paying by card. It offers transparent pricing with no monthly fees, you pay only per transaction. It also allows settlement to bank or mobile money wallets.

Key Details & Costs

• For local M-Pesa transactions via Paystack, expect a fee of about 1.5%.
• Local card transactions cost roughly 2.9%, and international card payments can reach around 3.8% depending on currency conversion and risk factors.
• Integration is straightforward with plugin support, webhook callbacks, and settlement periods usually around two business days.

Pros & Cons

Pros: Paystack offers a transparent, simple setup that developers appreciate. It supports multiple payment options, which is ideal for stores serving diverse customers, and it allows settlements in either mobile money or bank accounts.

Cons: Card fees can reduce margins, especially for low-priced products. Some customers may still prefer mobile money over cards for convenience and trust. International card usage can also introduce regulatory or currency exchange risks.

How to Choose & Integrate the Right Mix

Here are practical tips (we as IntelliMinds Technologies recommend) to pick and integrate the best gateways for your store:

1. Pick at least 2 gateways covering different payment styles
   For example: M-Pesa + Pesapal (mobile money + cards) or M-Pesa + Paystack. This reduces risk if one method fails or if customers strongly prefer a specific method.

2. Test user flow thoroughly
   Simulate checkouts on mobile devices, slow internet, low balance, and failed transaction flows. Use real devices and realistic network conditions.

3. Display payment options clearly at the start of checkout
   Don’t hide them until the last minute. Showing “Pay with M-Pesa / Cards / Pesapal” upfront builds trust.

4. Simplify forms and reduce friction
   Use “Pay with M-Pesa” buttons, enable autofill where possible, and keep required fields minimal.

5. Provide transparent fees & a clear refund policy
   Let customers know if they’ll pay anything extra and how refunds work.

6. Ensure regulatory compliance
   Work with gateways licensed by CBK (for Kenya) to avoid surprises. Keep up with tax rules such as the digital service tax if relevant.

7. Optimize for mobile
   Many customers will buy via phone; ensure payment pages are fast, buttons are thumb-friendly, and flows remain simple.

Conclusion

If you want to increase conversion, reduce abandoned carts, and build trust with Kenyan customers, offering M-Pesa, Pesapal, and Paystack as payment gateways gives you strong coverage. They complement each other well:

• M-Pesa covers mobile-money loyalists, especially where card use is weak.

• Pesapal offers flexibility and a card-plus-mobile-money mix.

• Paystack provides strong card support and transparent pricing.

We as IntelliMinds Technologies can help you audit your current payment setup, integrate these gateways, and test which combination yields the best results. This will help you improve sales, satisfy customers, and grow your online store reliably.