How to Price Your Product in Kenya and African Markets

To price a product in Kenya, start from what your customer already spends on the problem, set a price that covers your full cost per sale including payment fees and VAT, and test it with paying buyers before you commit. Shape the price around how your customers pay, and for many Kenyan customers that means M-Pesa, often in small and frequent amounts.

Every KES figure in this guide is an example unless I link a source for it, so swap in your own numbers as you read.

What is my customer already paying to solve the problem?

Every customer already deals with the problem somehow: a competitor, a spreadsheet, a relative who helps for free, or a trip into town. Ask what that costs them today, in money and in time. Say a salon owner spends about KES 3,000 a month on airtime and SMS to remind clients about bookings. A booking tool that replaces that spending has a natural anchor close to that figure.

Ask about the last time they paid for a fix, and how much it was. A past payment tells you far more than an answer to "would you pay for this?", which most people answer politely.

What does each sale cost me?

Work out your full cost per customer before you choose a number. Include:

• Payment fees. Paystack Kenya lists 1.5% per M-Pesa payment and 2.9% per local card payment (Paystack Kenya pricing). A direct M-Pesa Business Till costs the business up to 0.55% per payment, capped at KES 200, and collections of KES 200 and below are free (Safaricom).
• VAT. The general rate is 16%, and you must register for VAT once your taxable sales reach KES 5 million in a year (KRA). Decide early whether your published price includes VAT. Adding 16% to a price customers already know is a hard conversation.
• Delivery and support. Riders, data bundles and the hours someone spends answering WhatsApp messages.
• Costs billed in dollars. Hosting, software and APIs priced in US dollars move with the exchange rate. Build a buffer into your shilling price and review it on a schedule.

Here is a worked example. Say a monthly plan costs KES 1,000. Paystack's M-Pesa fee takes KES 15. If the price includes VAT, about KES 138 of it is VAT. Hosting, SMS and support might take another KES 200. That leaves roughly KES 647 to cover salaries, marketing and profit, which is a lot less than the KES 1,000 on your pricing page.

How does M-Pesa change the way I should price?

• Small, frequent amounts. Many customers find a weekly or daily amount easier to manage than one large monthly charge. Offer both and see which one people pay on time.
• Round numbers. KES 500 is easier to remember and type than KES 487.
• Fee thresholds. On a Business Till, collections of KES 200 and below are free for the business. If you sell many small items, prices at or under that line cost you nothing to collect.
• Renewals. A card subscription renews by itself. An M-Pesa payment is usually a fresh decision each time unless the customer has set up a standing order, so send a reminder before payment is due and make paying one tap from that reminder.

Which pricing model should I choose?

• Pay as you go suits customers with irregular income, and works well with M-Pesa.
• Subscriptions suit businesses and professionals with steady cash flow. Offer a discount for paying several months upfront, which also helps your own cash flow.
• Commission suits marketplaces, where you earn when a sale happens. Check that your percentage covers what each transaction costs you to process and support.
• Freemium can build reach, and it pays off only when a clear share of users have a reason to upgrade. Set the free limit so your heaviest users reach it.

Business customers often need a quotation, an invoice and a KRA PIN on the paperwork before they can pay you. Price for the time that buying process takes, and ask for a deposit on larger orders.

How do I test a price before I commit to it?

1. Pick one customer group and one town or city.
2. Offer two prices to comparable groups, for example KES 800 and KES 1,200 for the same plan, and track who pays, who stays and who pays late.
3. Talk to the people who said no. Ask what they use instead and what it costs them.
4. Watch late payments. If people want the product but pay late, try smaller, more frequent payments before you cut the price.
5. Set a date to review prices, for example every quarter, so changes become routine for you and your customers.

Tell early customers when a price is an introductory one. It makes the later increase easier to explain.

What changes when I sell in other African markets?

Each country has its own payment habits, currency and tax rules. Even within one gateway, mobile money coverage differs: Paystack's documentation lists mobile money for Ghana, Kenya and Côte d'Ivoire, with different providers in each (Paystack payment channels). For each new market, find what customers there already spend, check how they prefer to pay, work out your local costs and taxes, and test again. Treat your Nairobi price as a starting guess elsewhere.

If you want to test prices alongside other founders, the Hackhouse Residency runs for 12 weeks, takes no equity, and has HH Gen 27.1 applications open. Our events calendar shows what is coming up at the house.

Key facts

• Anchor your price to what customers already spend on the problem, in money and time.
• Paystack Kenya: 1.5% per M-Pesa payment and 2.9% per local card payment.
• M-Pesa Business Till: up to 0.55% per payment, capped at KES 200, and free on collections of KES 200 and below.
• VAT is 16%, and registration is required once taxable sales reach KES 5 million a year.
• Test two prices on comparable groups before you settle on one.
• Set the price for each new country from local evidence on spending, payments and costs.

Frequently asked questions

Should I price in shillings or dollars?

Price in shillings for Kenyan customers, since that is how they earn and pay. If many of your costs are in dollars, build a buffer into the shilling price and review it regularly.

Should my price include VAT?

Once you are registered for VAT, decide whether your published prices include it and say so clearly. Consumers usually expect the price they see to be the price they pay, while business buyers will want VAT shown on the invoice.

How often should a startup change its prices?

Set a regular review, for example every quarter, and change prices when your costs, your product or your evidence from customers change. Give existing customers notice before an increase.

Is it better to start cheap and raise prices later?

A low launch price can win early customers, but raising it later is harder than starting near the right level. If you discount, call it an introductory price and give it an end date.

Sources

• Pricing (Kenya), Paystack, checked 5 Nov 2026
• Payment Channels, Paystack, checked 5 Nov 2026
• M-PESA Business Till, Safaricom, checked 5 Nov 2026
• Value Added Tax (VAT), Kenya Revenue Authority, checked 5 Nov 2026

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