The PayPal to M-Pesa service allows Kenyans to move money between their PayPal and M-Pesa accounts. Learn how to link your PayPal with M-Pesa, directly withdraw from PayPal to M-Pesa, and how to top up your PayPal account using your M-Pesa mobile wallet balance.
Growing numbers of young people in the developing world are looking offshore for online jobs and exploring different ways to make money online. While there are plenty of work and online business opportunities on the global market, getting paid and remitting those earnings is a big challenge for African freelancers.
Kenya is an exception, though, with IntaSend, Payoneer, and PayPal all available as options. PayPal, which many Western businesses prefer to use for paying service providers and accepting payment for goods and services is fully accessible to Kenyans.
Kenya is one of only a handful of countries in Africa where you can use PayPal to both receive payments and transact. In many other developing countries, you can’t get paid through PayPal. This makes it a challenge to fund PayPal accounts and use them to shop online.
In Kenya, thanks to the PayPal to M-Pesa service, getting paid through PayPal and withdrawing those earnings is less painless. This service allows you to move money between your PayPal and M-Pesa accounts.
Not sure how PayPal to M-Pesa works? This article is your ultimate guide to the PayPal M-Pesa money transfer service. After reading, you will know:
- What PayPal M-Pesa is,
- How to link your PayPal with M-Pesa,
- How to withdraw money from your PayPal to M-Pesa account,
- How much it costs to top up and withdraw from your Paypal account using M-Pesa.
Let’s dive right in.
What is PayPal M-Pesa?
PayPal to M-Pesa is a money transfer service that allows you to transfer money from your PayPal balance to your M-Pesa account in Kenyan shillings. It also allows you to fund your PayPal account from the Kes. balance in your local M-Pesa account.
The PayPal M-Pesa service is a partnership between Kenyan mobile telecoms giant, Safaricom and the popular US payment gateway, PayPal. The partnership was inked in 2018 and has since become many Kenyans’ go-to solution for withdrawing from and topping their PayPal accounts.
For freelancers serving foreign clients, the PayPal mobile money service with M-Pesa enables you to convert and transfer your PayPal balance that is denominated in US dollars to Kenyan Shillings so you can use your earnings in Kenya to:
- buy airtime,
- pay for groceries at your neighborhood store,
- settle your utility bills
.. among the many conveniences that M-Pesa allows.
PayPal enjoys a lot of consumer trust thanks to the power of its brand and its ability to consistently create products that make online transactions easier for its users. That also explains why the company has managed to survive heavy competition from equally-capable competitors.
The secret to PayPal's success also lies in its ability to adapt to the changing needs of its customers. For example, when online shoppers realized they could protect their privacy while buying online by using a PayPal account instead of a credit card, PayPal became the single most popular way to pay online.
In recent years, PayPal has used its unparalleled digital expertise to provide millions of customers with the best online banking experience.
While PayPal services have been thoroughly enjoyed in the more developed areas of the world, the company has pursued an exclusionary policy in Africa, where it cites poor regulation and weak banking systems as the reasons.
With Kenya and a few other countries as exceptions, people in most African countries can only use PayPal to pay for goods online. They cannot get paid through PayPal and must find other ways of funding their accounts if they want to use them to shop online.
That limitation has locked many out of the global online jobs market where many clients prefer to pay through PayPal.
If you’re an African freelancer who needs to get paid as swiftly as possible, you should find this guide on the best payment methods for African freelancers in 2022 very helpful.
History of PayPal M-Pesa
Despite its many limitations, there is no denying the big impact PayPal has made. It made it possible for people to shop online when it was very difficult to do so. In doing so it made life and business easier for people across the world.
PayPal’s initial partnership with Kenya Equity Bank was a test case of how much the African market could contribute to its growth, especially in Kenya, where the growth of e-commerce and the freelance market have experienced rapid growth year-on-year.
This partnership liberated Kenyan PayPal users to a point but didn’t solve all the problems because not everyone had access to Equity Bank due to its limited online presence.
A few years later, PayPal struck another partnership with Thunes, and Kenyans loved it more because Thunes is closer to the masses than Equity Bank. The partnership allowed M-Pesa users to link their accounts to their PayPal accounts for seamless withdrawal and transfer of funds between the two digital wallets.
M-Pesa’s partnership with PayPal has helped grow its user base and expand its reach in other markets outside the country's major urban centers, increasing the size of Kenya’s economy.
In part because of the PayPal M-Pesa partnership, M-Pesa has become a dominant player in the country’s mobile money market. The service now has over 30 million registered users in Kenya and records about $4 billion in transactions each year, making it the largest mobile money platform in the country.
M-Pesa is also the country's most widely used mobile money transfer service. It speaks volumes that out of M-Pesa’s 50 million global users, 30 million of whom are registered in Kenya. This speaks to the exponential growth of Kenya’s mobile money/digital wallet market.
Let’s now get into the mechanics of how the PayPal to M-Pesa service works:
How Does PayPal to M-Pesa Work?
The PayPal to M-Pesa withdrawal service allows users to move money between their PayPal and M-Pesa accounts.
To use the service, you must have a PayPal Kenya account and a Kenyan M-Pesa account. This means the PayPal M-Pesa service is only available and accessible in Kenya.
You can register for a PayPal account on their website. To register for an M-Pesa account, visit any of Safaricom’s agents across Kenya.
There is no actual process for registering for the PayPal M-Pesa service. You qualify for the service if you have eligible PayPal and M-Pesa accounts. What you, however, need to do before you can move money between the accounts is to link the two accounts.
How To Link PayPal to M-Pesa in Kenya
Before you start enjoying the PayPal Mobile Money Service with M-Pesa, you must first link the two accounts.
Follow these steps to link your PayPal and M-Pesa accounts:
1. Visit the PayPal Mobile Money Service with M-Pesa page.
After you confirm that you are human, you will be taken to this page:
2. Log in to your PayPal account
To initiate your PayPal M-Pesa log-in, click the login button in the upper right corner of the screen. This is the same login sequence you follow when you log into PayPal. So use your regular PayPal username/email and password.
If you don't already have a PayPal account, you have to sign up for one first before you can use the PayPal M-Pesa withdrawal/top-up service. You can sign up for a PayPal account from the same website. See instructions on the image in step 1.
3. Add your registered M-Pesa mobile number.
You will be asked to fill in your M-Pesa registered mobile number. This is the Safaricom number you use for your M-Pesa account. After you do that, click on the Link Your Accounts button.
4. Collect and fill in the confirmation code
As a security measure, before linking your two accounts, PayPal will want to know that it is you performing this action. So the system will send a 4-digit confirmation code to your M-Pesa mobile number. Collect that code from your mobile phone and fill it in.
NOTE: Many users have reported getting error messages when trying to link their PayPal and M-Pesa accounts. To avoid these errors, ensure the names you use on the two accounts match.
If you are unable to link your PayPal and M-Pesa accounts, it’s usually because the account names don’t match. If the names match and the error messages persist, you should contact support to get the issue sorted out.
How to Withdraw Money from PayPal to M-Pesa in Kenya
After successfully linking your PayPal and M-Pesa accounts, you will be able to withdraw money from your PayPal balance. You can only withdraw from your USD balance, so before you withdraw, log into your PayPal Kenya account to convert your balance to USD.
Follow these steps to complete a withdrawal from PayPal to M-Pesa:
1. Log in to your account from the PayPal to M-Pesa login page,
2. Now, click withdraw and add the amount you wish to withdraw to your M-Pesa account.
The system will then redirect you to a page that shows you:
- The amount you are withdrawing in Kenyan shillings,
- The exchange rate used for the USD/KES conversion,
- The estimated transaction completion time.
3. Confirm the transaction to complete the withdrawal.
PayPal to MPesa says it takes between 2 hours to 3 working days before your money reflects in your M-Pesa account. The time it takes for the withdrawal to complete depends on several factors, including the value you’re trying to exchange.
How to Load Your PayPal Account Using M-Pesa
For many people in Kenya, the biggest convenience the PayPal M-Pesa service offers is the ability to top up their PayPal accounts using their KES-denominated M-Pesa balances.
This has enabled ordinary people who do not have access to USD to fund their PayPal accounts. That, of course, is not an issue for freelancers who work and earn US dollars online. Those can fund their PayPal accounts by asking clients to pay them directly into those accounts.
For those who can’t get paid through their PayPal accounts, the best option is to load those accounts from their M-Pesa balances. Here are the steps to follow:
1. Determine the USD amount you need to transfer from your KES-denominated M-Pesa wallet
The best M-Pesa to PayPal calculator you can use is the one provided for you on the same PayPal to M-Pesa website. This is the same website you use when withdrawing from your PayPal to your M-Pesa accounts.
Simply click top up and add the amount you wish to transfer from your M-Pesa in USD. After you click calculate, the amount will be displayed in Kenyan shillings. You will also see the exchange rate used displayed there.
So we can surmise that the M-PayPal to M-Pesa dollar rate changes with exchange rate fluctuations.
2. Open the M-Pesa menu on your mobile
With the KES equivalent of the USD amount, you need to transfer from your qualifying M-Pesa account in hand, open the M-Pesa menu on your mobile.
3. Select the Pay bill option
On the M-Pesa menu, select Lipa na M-PESA and then choose the Pay bill option.
4. Enter the business number
You will be asked to enter the business number. Enter the number 800088
5. Enter your mobile number
Then enter the mobile number you use for the M-Pesa account you linked with the PayPal account you are loading,
6. Enter the amount you are transferring in Kes
This is the KES equivalent of the USD you want to top up your PayPal account with.
7. Enter your M-Pesa PIN
Entering your M-Pesa PIN authorizes the transfer from your M-Pesa mobile wallet to PayPal account.
And that’s how you deposit money into your PayPal account using your M-Pesa account.
M-Pesa to PayPal transfer limits
Just like with every other mobile money service, there’s a daily limit when loading your PayPal using M-Pesa. Regular M-Pesa limits apply to the PayPal M-Pesa service.
You can only deposit or withdraw up to Kes.150,000 on a single transaction. The daily limit is Kes.300,000. If you’re a big business that handles transactions above these limits, you may have to look elsewhere.
PayPal M-Pesa withdrawal charges
PayPal has been derided for its high transaction fees. That’s one of the issues you will have to contend with when you use their money transfer service with M-Pesa.
To withdraw from your PayPal balance, you will be charged 3% of the amount you convert USD to Kes. When topping up your PayPal from your M-Pesa account, you will be charged 4% of the amount you are topping up with.
Common PayPal to M-Pesa withdrawal issues
The PayPal to M-Pesa withdrawal service has helped many businesses in Kenya solve the problem of withdrawal of funds. Before people relied on the Equity Bank service, which wasn’t as accessible.
However, there are a few issues you have to be aware of before using the PayPal to MPesa service. Let’s discuss some of them below.
Held payments
If you're a new PayPal user, the first payment you receive might be held for some days to make sure the sender doesn't raise any dispute regarding the payment. The money will be held in escrow, which means it is placed in custody until a condition has been met or the money has been cleared for use.
PayPal uses a risk-based algorithm to determine whether or not to hold a payment. The higher the risk, the longer the amount will be held. The amount is held in the receiver's account until the sender confirms the transaction from their end.
If you manage to find a better alternative to PayPal, you may never have to go through anything like held payments again except in exceptional circumstances.
Non-local support
Another challenge African PayPal users have faced over the past few years is inadequate local support. There is no dedicated support team to cater to the specific needs of PayPal users in Africa. For complex issues, you may prefer to deal with a support technician you can engage with in your local language.
This should not be a surprise though as PayPal was not originally tailored to the needs of users' in our part of the world. So, instead of sticking blindly with a provider that does not understand your unique needs and challenges, you should opt for a homegrown payments gateway with local support, like IntaSend.
Other challenges you will encounter with PayPal include;
- Hefty service fees.
- Limitations to unstable terms of use that can lead to arbitrary account suspensions and restrictive limits.
- Card rejection issues,
- Inability to complete certain transactions.
PayPal to M-Pesa - FAQs
1. Can I top up PayPal with M-Pesa?
PayPal users in Kenya can top up their accounts from the balances they hold in their M-Pesa mobile money accounts. To use the service, you have to link your PayPal and M-Pesa accounts.
Log into the PayPal to M-Pesa website to link your accounts and then complete the PayPal top-up sequence from your M-Pesa menu. We have covered the steps to follow above.
2. How do I withdraw money from PayPal directly to M-Pesa?
To withdraw money from your PayPal account directly to your qualifying M-Pesa account, you have to log into the PayPal to M-Pesa website. From your dashboard, click the withdraw button and complete the steps you will be led through.
3. How much can you withdraw from PayPal to M-Pesa?
Regular M-Pesa daily withdrawal limits apply for the PayPal M-Pesa money transfer service. The maximum transfer limit is KES 70,000 while the daily transactions total is capped at Kes.140,000.
4. How much does it cost to send money from M-Pesa to PayPal
The M-Pesa to PayPal transfer fee is 4% of the amount you are transferring. This means it will cost you Kes.2,800 to complete the maximum allowable transfer of Kes.70,000.
4. Why is my PayPal account not linking to M-Pesa?
When you are unable to link your PayPal and M-Pesa accounts, it is usually because the names you use for the two accounts don’t match. Verify and make sure the account names match. Otherwise, contact PayPal to M-Pesa support.
5. What is the pay bill for PayPal Kenya?
The pay bill number for M-Pesa PayPal account top-up is 800088. This is the business number you will be asked to enter on the M-Pesa menu when loading your PayPal account from the balance on your M-Pesa account.
6. How do I check my PayPal exchange rate?
Use the account top-up feature on your PayPal to M-Pesa dashboard to check the exchange rate you should use for determining how much in Kes. you have to transfer from your M-Pesa account to get the USD amount you want to load to your PayPal account.
After you click the top-up button, add the USD amount you wish to transfer from your M-Pesa account. After that, click calculate. The calculator will convert the USD amount and display its Kes. equivalent. Also displayed will be the exchange rate used.
The Best PayPal Alternatives In Kenya
The PayPal to M-Pesa service has many conveniences. But for businesses that transact in large amounts and freelancers who receive regular payments from clients abroad and wish to avoid PayPal’s punitive fees, it’s worth considering local alternatives.
Among your best homegrown PayPal alternatives is IntaSend. With IntaSend, you can get paid from anywhere in the world using our simple payment request links.
Not just that, but you can also use your IntaSend account to make payments online using your M-Pesa balance or Visa or Mastercard. Through IntaSend you can also accept payments on your website or ecommerce store.
If you operate a business in Kenya and deal with merchants within and outside the county, you can use IntaSend to make your business payments from one central place.
Also among the business perks you don’t get with PayPal, IntaSend allows you to make scheduled payouts to creditors and service providers. Not to mention the detailed reports and advanced business analytics tools that allow you to make informed business decisions.
And just like PayPal M-Pesa, IntaSend also supports withdrawals to M-Pesa and local banks. A great tool for anyone starting a business, the payment gateway is trusted by over 3,000 businesses and developers in Kenya.
Request a demo or sign up for an IntaSend account today and start enjoying safe and fast money transfers, financial tools designed with small and growing businesses in mind, and painless online payments in a secure environment and at the lowest costs available on the market.
