The wide use of Safaricom mobile money services has increased the demand for MPESA agents, making it a lucrative venture. Are you searching for a guide on how to start an MPESA business?
To invest in an MPESA subdealer business, you require Kshs 70,000 and a minimum float of Kshs 30,000. You also need Kshs 15,000 goodwill for a non-aggregated line.
MPESA can operate as a stand-alone or integrated business to increase profitability. This flexibility makes it an ideal venture for people with stores or shops that depend highly on MPESA services, benefiting your businesses while earning good returns.
This exhaustive guide covers the following:
- What you need to know about MPESA business
- The requirements of an MPESA business
- How to increase your MPESA business profitability
Let’s delve in!
MPESA Business: What You Need To Know
If you’re new to the MPESA business, you may wonder what options you have. MPESA business has categories you can operate in. They include
Also known as the Agent, the Aggregator receives payment directly from Safaricom. It is the most lucrative category in the MPESA business, as you retain the entire commission. You must complete the whole registration process to start operating.
To become an MPESA aggregator, you must invest
- Kshs 100,000 float per outlet
- Kshs 100,000 for SIM replacement cards
Popularly known as the sub-dealer, the sub-agent is the most affordable MPESA business category. Typically, you must work under a Safaricom Aggregator to become a sub-agent.
The agent gives you a till to transact with, earning them 20% of your commission. As a result, you retain 80% of the commission sent by Safaricom. To invest in the sub-agent category, you must maintain a minimum float of Kshs 30,000 to keep your shop operational.
How To Start an MPESA Business: Requirements
Although becoming an MPESA agent or sub-agent is free, it has its financial and non-monetary requirements. Below is a detailed outline of the demands for each
MPESA Agent Requirements
Fulfilling all the agent requirements allows you to benefit the most from MPESA services. Reason? You get to earn the highest returns from Safaricom. So, what do you need to become an agent?
To operate an MPESA agent business, Safaricom requires you to meet the following financial demands
- A minimum initial float of Kshs 100,000
- Maintain a minimum of Kshs 100,000 float in all your outlets
- 3 outlets covered by a limited company
- Your outlets should be in different counties
Typically, you need an initial capital of Kshs 400,000 and above to establish your outlets, invest float, and hire staff to run your outlets.
Safaricom requires you to have the following documents to become an MPESA agent.
- Filled agent forms
- Good conduct certificate
- Certificate of incorporation
- CR12 certificate showing the details of shareholders of the limited company
- ID copies of administrators and assistants
- Business permits for every outlet
Other requirements of an MPESA agent business include
- A computer and a printer
- One or two assistants to run the main office
- Stable internet connection
- A primary main office phone number and email address
- ETR machine
- Furniture and stationery
MPESA Sub-Agent Requirements
The MPESA sub-agent is the most common business category. They serve MPESA clients directly.
To become a sub-agent, you will apply for registration in an Agent’s office. They will then give you a till number to complete all your transactions.
To operate our store, you need a minimum of Kshs 30,000 float, an attendant, and a rental space. You also need a bank till where Safaricom will be depositing your commission.
Tips To Run A Successful MPESA Business
To earn good returns from MPESA business, apply these tips in your shop
1. High Traffic Location
To maximize your returns in an MPESA business, you must find a suitable location to set up your shop. The best place to find customers is a high-traffic area that’s easily visible and accessible.
In addition, you should rent a space near businesses such as pharmacies, retail shops, fast food joints, and boutiques. This will increase your number of clients as those business people need to make deposit and withdrawal transactions regularly.
2. Have Enough Cash
Imagine visiting an MPESA shop that never has cash whenever you want to withdraw. This would discourage you from seeking services from this business. The availability of money allows you to serve more customers.
It makes you a reliable MPESA service provider, attracting loyal customers and even referrals. That’s why you should keep enough cash in your shop to ensure your customers are served satisfactorily.
This tip will help you beat your competition!
3. Find a Secure Location
Having money in your MPESA premises is excellent for your business. However, it attracts robbers, and therefore, it’s risky.
As a result, you should find a rental space in a secure area that allows you to operate your business smoothly. This way, you will minimize financial losses from theft and prevent disruptions due to theft.
4. Utilize a Counterfeit Cash Detector
Fraud isn’t always detectable in the MPESA business. You will encounter individuals who deposit counterfeit cash, leaving you with huge losses. You don’t have to be a victim of these cases; you can verify each note that gets into your premises.
All you need to do is purchase a counterfeit cash detector. Then, pass every note you receive on this machine to ensure you only transact with original money since not everyone notices a fake note by touching or viewing it.
5. Integrate Other Businesses
Establishing an MPESA business solely can be difficult due to the limited number of services and earnings. As a result, most entrepreneurs prefer to integrate it into other ventures such as salons, pharmacies, and retail shops.
This allows you to offer a wide variety of products and services, increasing your income level. Moreover, the businesses boost each other when one performs well and the other does not.
Frequently Asked Questions
1. How Do MPESA Agents Make Money?
MPESA agents get paid by Safaricom. Their earnings match the commissions depending on the transactions they facilitate.
However, it’s important to note that an agent earns from what sub-agents offer. Sub-agents get 80% of the commissions, leaving agents with 20%.
2. How Much Does An MPESA Agent Earn Per Month?
MPESA agent businesses in busy places earn a high monthly return of Kshs 50,000 and above.
Over To You!
Are you planning to start an MPESA business in Kenya? Start by choosing a category that fits your budget and business goals. You can either become an aggregator or a sub-agent.
Then, acquire all the documents and operational requirements to set up your shop in a strategic location. This will help you fetch massive profits.
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