How To Receive Payments Online

Update: PayPal now works in Kenya! You can also now withdraw from PayPal through Babawatoto or LibertyReserve.

Ok so you’ve decided to give this “make money online” thing a shot. You’ve figured out what you are gong to sell, to whom and how. Now one last thing remains. How will you get paid? How will you receive the chapaa? There are two ways you can receive payments online:

1. Having your own merchant account
2. Using third party processors

What is a merchant account?
A merchant account is a special kind of bank account where funds received from credit card transactions are first routed to the special account and held there before being remitted to your business account. You as an online merchant will need an account called “Card Not Present Merchant Account”. Merchant accounts are only useful when you are receiving payments on your own website (Get one!!) and have some sort of payment processing system already in place on the website (basically, a shopping cart system.

Having the merchant account is, actually, the first step in processing credit cards online. You will also need a payment gateway. A payment gateway is a service provided by billing processor which allows real time authorization of online transactions.The payment gateway you choose to work with has to be compatible with your shopping cart. Three top payment Gateway providers are AuthorizeNet, Verisign and USAePay. All payment gateway providers have their own merchant solutions. Most banks, today, work with partner payment gateway providers and are fully capable of furnishing with a merchant solution.

If you are just starting an online business and you don’t think that your sales will generate more than a thousand dollars a month, you will be better off with a third party processor. However, once your sales become really high, you will save a bundle by switching to a merchant account.

With 72 million accounts worldwide and payment volume which is growing at a rate of 44 percent each year, PayPal by far is the most popular third party processor on the Internet. PayPal is a simple and affordable payment solution for those online merchants who are unable to or don’t want to go through the complex process of setting up a bank merchant account. Merchant losses from fraud on PayPal are now only 0.17% of revenues, vs. 1.8% for online merchants that accept credit cards through merchant accounts. This gives one more reason to use PayPal.

Paypal is also perfect for receiving small payments. For example, if you are a freelance writer and you do some small job, you don’t need a big huge merchant account – just request to be paid through Paypal. Once the money is in your Paypal account, you can use it to pay for things online, or you can request Paypal to send the money to you.

Getting a Paypal account in Kenya used to be impossible but they opened that up and you can get one right away. The bet way to use Paypal from Kenya is to use it in tandem with a Debit card. Basically, get a Debit card (I got mine from KCB) and then link it to your Paypal account – you will need to verify the card by entering into Paypal some code that will be on your bank statement. You will also need to verify your address by scanning and sending to Paypal a document (like a water of power bill) showing your name and address on the face. Doing these verifications may seem like a chore but, trust me, you will be love the simplicity and assurance that Paypal is known for.

Clickbank is a laaaarge marketplace where sellers list digital products for sale. The thing that’s special about clickbank is that hundreds of thousands of people ready to market and sell your product for you for a commission. By listing your product on clickbank, you access a huge market. For selling e-books, software and other similar digital products, ClickBank is probably your best option. ClickBank accepts all major credit cards and PayPal.

Did you know that you can accept payments online through Safaricom’s MPESA service? Nice eh? I’m pretty new to it so I cannot really review it but here’s what you need to do if you want to accept payments online via MPESA:

  1. Send an email to requesting for the service
  2. Safaricom then responds with the requirements, tariffs and supporting Docs required.
  3. Agreements and contract drafted
  4. Allocation of code number, account creation
  5. Service Goes live

There are many other third party processing companies available on the Internet. Two of them worth mentioning are moneybookers and ikobo.

Additional Resources


  1. Hi, is it possible to receive money with pay pal from Kenya or any other African country, i think the last time i checked this online payment stuff, one could only send money and not receive especially if you are using a local account, and if so will pay pal channel the cash to your local account upon request? or will the money have a limit of only purchasing goods/services online i. e from ones merchant account.

    Regards Titus

    • Hi Titus. Thanks for stopping by. You’re right, money in your paypal account cant (yet?) be withdrawn directly to Kenya. Currently when I need to get cold hard cash off paypal I use it through my getafreelancer (www.getafreelancer / GAF) account where you can wire money to Kenya, or get a GAF Debit card that is acceptable wherever Mastercard is accepted (in Kenyan shops).

      It’s tough working from Kenya though – a while back we couldn’t even get Paypal accounts here. But it’s getting better, one hopes.

      How do you cope?

  2. Thanks Kelvin, I accept payments through Mpesa and cheques /cash and this limits the boundary of my business, it’s also a challenge to ecommerce development.
    Please expound on how I can get the hard cash, what are the requirements.

    • Give me a few hours and I’ll come up with a working, hopefully permanent, solution.

      • thanks for coming up with this article.Recently there has been a company selling virtual credit cards that makes online transactions possible .unfortunately i forgot its name .it has been running ads upto to last week in facebook

    • Titus, I’m still on this. I’ll get back to you with a comprehensive answer as well as creative work-arounds 😀

  3. Ok, will appreciate that.

  4. if i read clearly its only kcb debit card that go in tandem with the the paypal?
    what if i dont have my own water and electricity bills can i fake the the bill using my name??

    • It’s not nice to fake 😛 How about using a letter from school, or a transcript? As long as it has your name and address and looks official.

      Also, KCB’s card is the easiest but any Msstercard/Visa card should work.

  5. Making money online is great

  6. Mpesa is available in the Uk.Go to and look for mpesa icon and you are in.

  7. Gr8ful to find out gud infor about receiving payments online,thanks

  8. Hi, am currently trying to venture into online moneymaking jobs. Any suggestions on which sites I shld go to and what kinds of jobs are available?

  9. Thanks for the info. I’ve some ebooks coming up and I would appreciate if you could expound on how to use mpesa payments for digital downloads. And please do some spell check in this great article. Thanks.

  10. Hi,
    Do you know that you can’t open a clickbank account in Kenya? Kenya is not available in the country drop down list even though other African countries are there.

    What do you think?

    • Unfortunately, that is true 🙁

      I have no idea why it is so…everything seems to work together to put us at a disadvantage, eh? Le sigh.

  11. Hi i have lately have trouble with how to recieve payments online to my local bank account,i opened a paypal account hopeing to sort my problem only to be infromed that i need to verify my business account with paypal they put my paypal account on hold until i did this,then i found out that with paypal one can not recieve payment from Kenya we only have the send funds option.
    This added to my problems on how to recieve payment online to my local bank account,i verified my paypal account and the hold is still on since i have to prove my identity.
    I had i thought if we as Kenyan who wish to do online business on site such as e-bay and the like could send e-Mails to the paypal management or the paypal president to extend the RECIEVE FUNDS option to Kenya via paypal we would do business with no worries of payment.
    I wish to give a website where one could get e-mail address for paypal management.( can unite and send mail so that we can enjoy what the rest of the world are haveing.

  12. Hey the fact that Kenya is not among the countries that clickbank supports is really eating me up!! Something must be done asap

  13. samuel mburu says:

    have you tried does proccess the funds funds fast.they bhave a link with moneybookers.and they arevery fast.sammy.

  14. hi kevin

    i am looking around for place where i can purchase m-pesa or zap on the internet and found but they seem not be able to access my visa card.

    is there any site that you may have heard of?

  15. Hi,

    And today I discover a very funny thing, if your employer is in the US, they cannot make payments to you using moneybookers 😀 there goes my two weeks pay! Making money in the third world country is proving to be very challenging!

  16. Tell them to send it through Money Gram. Alternatively open a PayPal account and tell them to send the money there. You will figure out how to get it out of the PayPal account once it is there…it is possible to do that.

    Best of luck!

  17. Yeah I know I can use moneygram, western union but ever wondered why freelance employers don’t use it? I just think they try to save costs both on yours side and their side but I actually don’t know. I am a pessimist, I would rather know how I would get that money out before putting it there because I pay my bills using this money that I make online.

  18. I hear you can use,,, etc to get it out. I have never used it but I believe it can work. Try and dig around a bit and I believe you will find out how.

    Note: It is better to have the money in YOUR PayPal account than have it still with the client. Well, I may be wrong but that is what I think.

  19. I am registered on all those sites but most employers prefer paying outside the sites, again the charges thing. I always use moneybookers but now I got a new employer who is from the US and has just discovered he cannot transfer money to me using moneybookers. But I will dig around EFT and see if it is better.

  20. I meant you get the money to PayPal then put it in your freelance account with one of those freelance sites then withdraw it the same way you withdraw when you get work from the freelance sites. You need to be careful though. The sites should not realise you are using them(it-the freelance site) to transfer money. Also you can use a friend to help you collect the funds. If you trust them that is.

    EFT is expensive and cumbersome. Most clients will prefer not to use it. From my experience. However, if the amount of money you are getting is large then it is worth it as the fees will be negligible when compared to the amount.

  21. Oh thank you so much for that info. Now I have to figure out a way of not getting caught LOL! Part about a friend…….is like offering someone an indecent proposal! Temptations! But you’ve just opened my eyes to some possibility there I even think I know how not to get caught! Thanks again!

  22. Great! It is way easier to get paid online now than it was a year or so ago. Don’t get caught though. Good day and happy new year!

  23. willz lancer says:

    I just hard that KCB is working things out:) sooner rather than later you will able to get payments from Paypal…any one with information on this??

  24. thenks kevin, let me try online mpesa for my bizz, have a gret day!!

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