What is the difference between Paybill and Till Number?

This article will address the difference between the Mpesa Paybill and Buygoods (M-PESA Business Till Number) products.

Difference between Paybill and Till Number.

The difference falls into these three categories:

1. Charges
2. Cost
3. Account Number

To understand why two different products exist, we have to go back to the early days of Mpesa.

When Mpesa launched in 2007, sending money between individuals was the only option. However, due to the growing popularity, the businesses that got interested purchased a dedicated regular phone number to collect the payments. 

These are some of the challenges businesses that use regular phone numbers often face.

1. Fraudulent reversals: You risk having customers fraudulently requesting a transaction reversal after you have rendered a service or released a product.
2. Transaction Limit: You have a limit of only ksh. 150,000 per transaction and a maximum of ksh. 300,000 in your wallet.
3. Incorrect phone number: Phone numbers are long, and your customers can easily mistype them, sending the money to the wrong phone number. 

To solve these problems, Safaricom, in partnership with Kopokopo, launched Buygoods and Paybill. 

What is Buygoods (Till Number)?

A Buygoods number is a short 6-digit number that a business shares with its customers. Buygoods is best for small customer-facing businesses such as supermarkets, hardware, e.t.c, where such interaction is short-lived.

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Pros:

1. Cheaper than Paybill on small amounts. Transaction charges are 0.25% for amounts below 200 and 0.5% otherwise.
2. Buygoods Transaction charges are a percentage of the transaction; it's, therefore, easy to predict. 
3. Reduces the risk of fraudulent reversals, as Safaricom has to get authorisation from the business before reversing the amount from the Till Number.
4. Till numbers are easier to acquire than Paybill
5. Free for the customer.

Cons:

1. Unlike Paybill,  the Till Number product assumes that one account (based on the phone number) does not make the same payment frequently. 

What is Paybill?

A Paybill is a 7 - 9 digit number that represents an organisation. The organisation can then provision another number, the account number, per customer or invoice. This account number makes it super easy for the business to reconcile its books later.

A Paybill number is best for recurring transactions, e.g. Utility bills, invoice payments, gambling or APIs.

Pros:

1. The account number makes it easy to reconcile the payment.
2. Reduces the risk of a customer paying the wrong Paybill as the account number will not match.

Cons:

1. Most expensive Mpesa product. The transactions are charged in bands and, therefore, harder to predict. 
2. Having an account number could be tiring for your consumers as they must memorise another number, the account number.

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Similarity between Paybill and Buygoods.

1. They are better for collecting payments than a regular phone number, as highlighted in the pros and cons above.
2. They are both available to integrate with the Mpesa API.
3. They both require authorisation before funds can be reversed.

Summary.

The difference between Paybill and Buygoods is therefore summarised into the following:

1. Charges: Buygoods is charged as a percentage of the transaction, while Paybill is charged in bands.
2. Cost: The cost of using Buygoods is free for the customer, while on Paybill, the cost can either be entirely free for the customer, shared between the customer and the merchant or wholly borne by the customer.
3. Account Number: Paybill has an account number that makes it easier to reconcile the transaction, while Buygoods does not. 

What do we recommend?

If you are looking to integrate the Mpesa API to reconcile your payments automatically, we recommend that you apply for a Paybill number. Why? Since July 2022, Safaricom has started masking our phone numbers in their API responses. With Paybill, you can ask your customers to input a unique Account Number that helps you reconcile the payment.

However, if your purpose is just to use the STK pop-up, then Buygoods will be the recommended option.

• How to request for an Mpesa Paybill or Buygoods

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