On the fifth of every month, many landlords and property managers in Kenya go through the same ritual: scrolling through M-Pesa messages, trying to work out which tenant sent which payment, who has paid in part, and who hasn’t paid at all. Tenants pay with their house number, their name, their phone number or nothing. Some pay from a relative’s phone. Some split rent across three payments. This guide sets out a simple way to collect rent through an M-Pesa paybill or till so that most payments match themselves and arrears are visible at a glance.
Paybill or till: which should a landlord use?
A paybill lets the tenant enter an account number with each payment, and that account number is what makes automatic matching possible. A till (Buy Goods) is simpler to pay into but carries no account number, so every payment has to be matched by phone number or by hand. For anything beyond a handful of units, a paybill with a clear account number rule is the better choice. Whichever you use, the account should be in the name of the landlord or the managing agent’s client account, not a caretaker’s personal line.
Step 1: Make the unit the account number
Give every unit a short, unique code that combines the property and the unit, such as KIL-B4 for Block B, house 4 at a Kilimani property. Tell tenants to use that code as the account number, and repeat it everywhere: the tenancy agreement, every rent reminder, every receipt and a notice in each unit. Use the unit, not the tenant’s name, so the rule still works when a tenant moves out and a new one moves in.
Step 2: Decide what a payment pays first
Tenants often pay one amount that has to cover several things: rent, water, service charge, garbage collection, a late fee or old arrears. Agree an order and write it into the tenancy agreement. A common order is oldest arrears first, then the current month’s charges, then rent. Applying the same order every time makes statements predictable and avoids arguments about which month a payment was for.
Step 3: Match on account number first, phone number second
Payments with a correct unit code can be posted automatically. For the rest, match the paying phone number against the numbers registered to each tenancy, including anyone who regularly pays on the tenant’s behalf. Anything that still doesn’t match goes into a short review list rather than being guessed. When an unknown number pays for the same unit twice, register it so it matches next time.
Step 4: Send a receipt for every payment
Every payment should produce a receipt by SMS or email showing the amount received, what it was applied to and the balance remaining. Receipts end most “but I paid” disputes before they start, and a tenant who used the wrong account number usually notices it on the receipt the same day.
Step 5: Remind before the due date, not after
A short reminder a few days before rent is due, with the paybill number and the tenant’s unit code, does more than a stern message after the fact. Follow up on the due date for anyone who hasn’t paid, and again a few days later, keeping the tone polite and the balance exact. Automated reminders keep this consistent without the caretaker having to make calls.
Step 6: Keep an arrears list you can trust
At any moment you should be able to see, per property, who has paid in full, who has paid in part and who hasn’t paid, with the amount owed and how long it has been outstanding. Reconcile this list against the paybill statement at least weekly, so the figure you act on matches the money actually received.
Step 7: Handle deposits separately
Record tenant deposits apart from rent, with the date and amount received. When a tenant moves out, you can then show exactly what was held, what was deducted and why, and what was refunded. Mixing deposits into rent income is one of the most common causes of move-out disputes.
Frequently asked questions
Can I collect rent through M-Pesa without software?
Yes. With a paybill, a clear unit-code rule and a well-kept spreadsheet, a landlord with a few units can manage well. Software starts to pay off as the number of units grows, mainly through automatic matching, receipts and reminders.
What account number should tenants use when paying rent?
Use a short code for the unit, such as the block and house number, rather than the tenant’s name or phone number. It stays the same when tenants change and is easy to match.
How do I handle a tenant who paid with the wrong account number?
Match it by the paying phone number or the name on the M-Pesa record, confirm with the tenant, post it to the right unit and send a corrected receipt. Register the phone number so future payments match automatically.
Should rent go to a paybill or a till number?
A paybill is better for most landlords because tenants can enter an account number, which makes matching possible. A till carries no account number, so every payment has to be matched by phone or by hand.
Where Ananke fits
Our rent collection system works this way: payments are matched to units by account number or phone, receipts and reminders go out by SMS, and arrears and deposits are tracked per property. Tenants can check their own statements on the tenant portal, and vacant units can be advertised on a listings website. See the full real estate line. A demo takes 30 minutes, and you leave with a written quote.
To work out how a part payment splits across rent, water and arrears, try the free rent payment and arrears calculator.
SACCOs and schools face the same paybill matching problem; see SACCO M-Pesa paybill reconciliation.
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