Prepaid Electricity vending and Use

Published: Thu 04 Jul 2013
A blog entry by Ryan Rudman

Contributed by:

Ryan Rudman
Marketing Manager
Light Kinetics

Ryan Rudman's Blog

What are the benefits?

So you might be asking yourself, what is the big deal about pre-payment systems? Why are so many end users opting for prepayment, how it affects them, is it beneficial and what does this mean for energy resellers and distributors.

From a pure momentary point of view, end users or customers will be able to budget for their utilities more efficiently. How you ask?  Well once a prepayment system is installed you can actively monitor your consumption. The customer can then budget in advanced, based on a monthly cycle how much electricity they use. If you know how much you spend you can plan more effectively.

As a prepaid customer you do not need to pay a deposit like with post-paid connections. If a user runs out of credits, the utility is simply cut off, although this would be an inconvenience, when reconnecting there is no reconnection fee as seen with most municipal or post-paid accounts. There are also no issues with unpaid bills which might hinder the reconnection of an account.

The reseller or provider benefits because they do not carry the cost of a user’s debt.  There is a reduction in overheads cost, because there is no need to send out statements and printed documents or to pay for the postage there off.  The reseller or provider has the reduced financial risk as it receives payments ahead of the actual energy consumptions. The fact that they do not need to employ a meter reader reduces the overhead costs even further. The call rate and efficiency of the reseller or provider s call centre will improve as there will be fewer queries about incorrect billing and general billing issues.


With advances in technology and the introduction of AMI smart meters, consumers will have many more options available to them than just the preconceived purchase and use. AMI Smart Meters will provide real-time data useful for balancing electric loads and reducing power outages (blackouts / load shedding). It will enable dynamic pricing, raising or lowering the cost of electricity based on demand (if available in your country). It will also allow for tariff variations between Inclining Block Tariff and Time Of Use, to mention just a few.


So the choice is now do you or don’t you choose prepaid as your utilities provider



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