Kenyans abroad send billions of dollars home every year, and the cost varies hugely between services. The difference is rarely in the fee you see - it is in the exchange rate.

What a transfer really costs

Every transfer has two costs:

  1. The fee - shown up front.
  2. The exchange rate margin - the gap between the rate you get and the mid-market rate, the one you see on Google or Reuters. A service with “zero fees” often makes its money here.

To compare, ask each service: how many shillings will arrive for the same amount sent? That single number includes both costs.

Your options

  • Online money transfer services such as Wise, Remitly, WorldRemit, Sendwave and others are usually the cheapest, and can pay into M-Pesa within minutes. Wise uses the mid-market rate and charges a visible fee; others build more into the rate. Prices change and differ by country, so compare on the day.
  • M-Pesa Global lets people in some countries send directly to M-Pesa wallets, and Kenyans to send out.
  • Traditional agents like Western Union and MoneyGram have cash pickup across Kenya, useful for relatives without M-Pesa, but are often more expensive.
  • Bank transfers (SWIFT) suit large sums, such as buying property, but carry fees on both ends and weaker exchange rates.

Where the money lands

  • M-Pesa - fastest and most convenient. Remember M-Pesa limits: KES 250,000 per transaction and KES 500,000 held or moved per day.
  • A bank account - better for large amounts and for paying developers, schools or advocates.
  • Cash pickup - for relatives without an account.

Tips

  • Check the rate at the moment you send. Most apps show the amount received before you pay.
  • Send larger, less frequent amounts if fees are flat.
  • First-transfer offers can be good, but compare the normal price too.
  • Use the recipient’s registered M-Pesa name exactly; transfers to the wrong name are hard to reverse.
  • Keep records of transfers for property purchases - your advocate and bank may need to show where the money came from.

Watch out for

  • Requests for money from people you have not met, or from a “relative” on a new number.
  • Paying for land or a building to an individual rather than an advocate’s client account. See Kenyans abroad.

Next