A lot of people ask me this question whenever I talk to them about mobile payments. I have always assumed that all M-PESA users know the difference between the two services. I hope this blog post will be of help to everyone who wants to tell the difference between the two services.
Buy Goods payments are for immediate purchases for goods and services from a merchant, that is, face-to-face C2B (customer-2-business) payments. The payments are push transactions meaning that they are initiated by the customer.The customer has no official relationship with the merchant. This is the same service you find at Uchumi, Naivas supermarkets and Ashley's salons.
Pay Bill service is for non-face-to-face C2B payments. Pay bill payments are also customer-initiated and the customer has an official relationship with the organization they are making the payment to and usually have a prescribed account number which helps the organization identify the payer. Pay bill payments are made within a fixed timeline e.g paying your electricity bill monthly to Kenya power.
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