M-PESA Goes Contactless: Safaricom and Pesapal Turn the Smartphone Into Kenya's Payment Card

For eighteen years, paying with M-PESA at a shop counter has meant the same ritual: read the Till number off a worn sticker, punch it into your phone, retype it because you misread an 8 for a 3, enter the amount, enter your PIN, then wait for the cashier's machine to beep. On 1 October 2026, Safaricom and Pesapal began dismantling that ritual. Tap your phone on the machine, check the details, approve - and you're done.

The partnership brings three new payment experiences to Kenya's physical checkout: Tap-to-Pay, Dynamic Scan-to-Pay, and an AI-powered receipt scanner that quietly pushes computer vision into everyday commerce.

How Tap-to-Pay works

Tap-to-Pay uses near-field communication (NFC), the short-range radio already inside most modern smartphones. The cashier enters the amount on the Pesapal point-of-sale terminal; the customer taps an NFC-enabled phone against the machine; Safaricom's My OneApp opens with the merchant's Buy Goods number and the payment amount already populated. The customer verifies the details on their own screen and authorises the payment with an M-PESA PIN or biometrics.

There is no card to fish out, no sticker to read, no number to type. The smartphone has effectively become the payment instrument.

Notably, this also retires the hardware logic of Safaricom's earlier 1Tap system, which required a separate card, wristband or sticker to make contactless M-PESA work. Now the device already in every pocket does the job.

Dynamic Scan-to-Pay: the end of the manual Till number

For customers without NFC phones, Dynamic Scan-to-Pay offers the parallel path: scan a QR code displayed on the Pesapal terminal, and the merchant's details and the amount populate automatically. It builds on M-PESA's existing Scan-to-Pay service, which Safaricom says is already accepted at more than 60,000 merchant outlets - with a stated target of 500,000 outlets over the next year.

The elimination of manual entry matters more than it sounds. Every removed keystroke removes an error vector - the mistyped Till number that sends money to the wrong business, the fat-fingered amount, the queue that stalls while a customer retypes a transaction. In a market that processes millions of daily mobile-money transactions, checkout friction is a tax paid in aggregate seconds.

AI Pay: computer vision at the till

The most quietly significant piece is AI Pay, rolling out through My OneApp - the merged M-PESA and MySafaricom app that Safaricom says has passed 7 million downloads. AI Pay lets a customer scan a receipt - including a handwritten one - and, where the information is recognised, the app automatically identifies and populates the relevant M-PESA Till or PayBill details and the payment amount.

Think about what that implies. A hand-scrawled receipt at a kiosk, photographed by a phone, parsed by a machine-learning model, converted into a validated payment instruction - in seconds. This is applied computer vision doing unglamorous, high-volume work at the exact point where Kenya's informal retail economy meets its digital payments rails. AI stops being a boardroom topic and becomes the thing that fills in your Till number.

There is also a security dimension worth naming. NFC's short range and the on-device verification step make tap payments harder to skim than static QR codes, which have already been abused in Kenya through sticker-swap and code-replacement scams. But every new payment surface invites a new fraud playbook - expect social engineering around fake tap prompts and cloned terminal screens. Consumer education will need to move as fast as the rollout.

Why the Pesapal channel matters

Safaricom could not build this alone. The distribution lies with Pesapal, whose point-of-sale terminals are already trusted by thousands of Kenyan businesses - from chains like Java House and Artcaffe to independent retailers. By opening M-PESA's next-generation checkout on an established third-party POS network rather than waiting on proprietary hardware, Safaricom converts an installed base of terminals into contactless acceptance points overnight.

That is the classic platform move: own the payment experience, rent the distribution.

What to watch

Three things will determine whether this launch is a milestone or a press release.

First, NFC penetration. Tap-to-Pay only works for customers with NFC-enabled smartphones. Kenya's handset market is shifting in that direction, but a large share of daily M-PESA users carry budget devices without NFC. The QR path covers them - which is why the dual-track design is smart - but the tap experience will reach the mass market only as fast as handset replacement allows.

Second, merchant rollout speed. Sixty thousand outlets to half a million in twelve months is an aggressive multiple. The bottleneck will be terminal provisioning, merchant training, and the long tail of informal traders who have never used a POS device at all.

Third, the AI trust question. AI Pay filling in payment details from a photo is convenient - and it also makes the receipt a machine-read payment instruction. Expect the interesting edge cases (an ambiguous handwritten amount, a misread number) to surface as the feature scales. How Safaricom handles misreads will decide whether users trust the automation or revert to typing.

The bigger picture

Kenya's payment wars have always been fought at the last mile. Cards struggled for years because the checkout ritual favoured M-PESA; 1Tap tried to close the gap with hardware; QR codes widened access to merchants who could print a code instead of buy a terminal. Tap-to-Pay plus AI receipt scanning is the first iteration that removes the ritual itself rather than shortening it.

The strategic significance for the wider market: every friction point removed from digital payment is a reason for a customer to leave cash at home, and a reason for a merchant to stop handling it. In an economy where mobile money is already the default rail, the remaining battleground is experience - and this launch fires the opening shot of the contactless era.

For businesses: if you run a retail outlet and your POS provider hasn't talked to you about tap acceptance, ask. For consumers: update My OneApp, check whether your phone has NFC, and try the tap next time you see a Pesapal machine.

The queue is shorter. The PIN is still there - for now.

GashoTech will keep tracking the rollout numbers and the AI Pay edge cases as they surface.