M-Pesa B2C vs C2B Explained: When to Use Each

If you're building anything with M-Pesa Daraja API, you'll quickly run into the terms C2B and B2C. They sound similar but represent opposite directions of money flow. Pick the wrong one and your integration won't work.

The 30-Second Summary

• C2B (Customer to Business): Customer pays your business. They send, you receive.
• B2C (Business to Customer): Your business pays a customer. You send, they receive.
• B2B (Business to Business): Bonus type. One business pays another. Both have Pay Bills.

C2B in Detail

C2B is the most common transaction type. Anytime a customer pays you via M-Pesa — for an online order, a service, a subscription, a utility bill — that's C2B.

C2B sub-types

• Pay Bill: Customer manually enters your Pay Bill number, account reference, and amount. Old-school but still common.
• Buy Goods (Till): Customer enters your Till Number and amount. Simpler than Pay Bill — no account reference needed.
• STK Push (Lipa Na M-Pesa Online): Your system pushes a payment prompt to the customer's phone. They just enter their PIN. The modern way for online checkout.

For implementation, see our STK Push tutorial.

When to use C2B

• E-commerce checkout
• Subscription billing
• Service fee payments (consultations, deliveries, etc.)
• Donation collection
• Bill payments (utilities, rent)
• Event ticketing

B2C in Detail

B2C reverses the flow — your business sends money to a customer's M-Pesa wallet. Less common than C2B but critical for certain business models.

When to use B2C

• Refunds: Customer paid but you can't fulfill. Refund automatically.
• Loan disbursement: Microfinance, personal loan apps (Tala, Branch, KCB M-PESA loans use B2C internally)
• Earnings payout: Gig economy platforms paying drivers, delivery riders, freelancers
• Insurance claim payouts: Quick claim disbursement to claimants
• Promotion winnings: Competition winners, loyalty rewards
• Salary disbursement: Some Kenyan SMEs pay staff via M-Pesa B2C
• Bank withdrawal: Customer transferring from bank app to M-Pesa

B2C requirements

• Float in your Pay Bill: You can only send what you have. Must pre-fund the Pay Bill account.
• Approved B2C Daraja credentials: Separate "Go Live for B2C" approval from Safaricom (1–2 weeks)
• InitiatorName + SecurityCredential: Different from C2B credentials. Generated through Daraja portal.
• Documented use case: Safaricom reviews your B2C use case before approving

Code: Initiating a B2C Transaction

async function b2cTransfer({ phone, amount, remarks, occasion }) {
  const token = await getAccessToken();
  const payload = {
    InitiatorName: INITIATOR_NAME,
    SecurityCredential: SECURITY_CREDENTIAL, // RSA encrypted password
    CommandID: 'BusinessPayment', // or 'SalaryPayment' or 'PromotionPayment'
    Amount: amount,
    PartyA: SHORTCODE,
    PartyB: phone,
    Remarks: remarks,
    QueueTimeOutURL: 'https://yourdomain.com/api/mpesa/b2c/timeout',
    ResultURL: 'https://yourdomain.com/api/mpesa/b2c/result',
    Occasion: occasion,
  };

  const res = await fetch(
    'https://api.safaricom.co.ke/mpesa/b2c/v3/paymentrequest',
    {
      method: 'POST',
      headers: {
        Authorization: `Bearer ${token}`,
        'Content-Type': 'application/json',
      },
      body: JSON.stringify(payload),
    }
  );
  return res.json();
}

The CommandID must match the registered use case: BusinessPayment (general), SalaryPayment, or PromotionPayment. Use the wrong one and the transaction fails.

Key Differences at a Glance

What About B2B?

B2B (Business to Business) lets one business pay another via Pay Bills. Common use cases: supplier settlements, vendor payments, multi-business platforms (e.g., a marketplace paying merchants). Requires "Go Live for B2B" approval similar to B2C. Implementation is similar to B2C but with different command IDs and routing.

Combining C2B and B2C in One App

Most full-featured platforms need both. An e-commerce site collects payment via C2B (STK Push) and processes refunds via B2C. A loan app collects repayments via C2B and disburses loans via B2C. Plan your Daraja approvals accordingly — apply for both Go Live tracks at the start.

Frequently Asked Questions

Need help with M-Pesa integration? See our M-Pesa integration guide or get in touch.