With the emergence of blockchain and the almost daily announcements of new projects in the energy sector and beyond, the question arises on the wider application of cryptocurrencies and their use for making utility bill payments.
If all these projects are to be believed, there is apparently no shortage of investors snapping up the initial coin offerings. However, actual cryptocurrency use appears to be another matter.
Utilities offering cryptocurrency payments
Engerati has learned of just three utilities offering customers a cryptocurrency payment option – the Romanian energy supplier Eva Energy, the not for profit renewable retailer NextGen Energy in New Zealand, and possibly the first of all – dating back to September 2016 – the German municipal energy company Enercity AG (formerly Stadtwerke Hannover).
Of these, Eva Energy accepts any of a growing number of cryptocurrencies via the COSS payment gateway, while NextGen Energy and Enercity accept only bitcoins.
"Digitisation is already an integral part of our customers' everyday lives in many areas. The possibility of bitcoin payment is just one step towards the digital future," said Enercity CEO Dr Susanna Zapreva, in a statement at the launch of the service.
Enercity offers new payment options for its customers at an early stage in order to set new standards in customer service, she added.
So far, however, the response has been limited with fewer than one hundred transactions having taken place, an Enercity spokesperson told Engerati.
“These appear to have been from single customers wanting to check it out, probably digital natives looking to be trendsetters, but none are using this payment method regularly,” said the spokesperson. He also noted that while it is clearly not yet popular, the volatility and rally of the bitcoin stock may have served as a deterrent to some.
While customer uptake feedback hasn’t been forthcoming from either of the other companies, such a limited response probably isn’t surprising, given that cryptocurrencies are not yet widely used for financial transactions in other sectors of the economy.
Indeed, in a December 2017 interview, Scott Kessler, Director Business Development at the New York based blockchain pioneer LO3 Energy, said the company didn’t envisage an immediate future with customers paying their bills with cryptocurrencies.
“We think customers will continue paying their bills the way they always have with fiat currencies. The critical piece in moving towards the decentralised energy market isn’t payment, which is why we haven’t designed a solution around payment.”
How to offer cryptopayment
Inevitably in the longer term cryptocurrencies will become more popular and companies will need to start offering the option, alongside other payment options.
It also may prove attractive for companies, like NextGen Energy, that are providing power for cryptocurrency mining.
“NextGen is already supplying power to a number of cryptocurrency mining operations, and the ability to pay for the power in bitcoin simply makes sense,” says CEO Tom Wheatley. “We are now extending this option to all our customers.”
What is involved in setting this up? In the case of Enercity, the company has partnered with blockchain solution provider PEY from Hannover as the business partner, which handles the payment transactions with the global bitcoin payment service, BitPay.
Customers, who require a digital wallet, are offered three ways to pay. One option can be completed on a smartphone via a scannable QR code on the bill, which can draw payment from the digital wallet. Alternatively the customer can make payments online at the company’s website or via a terminal in the customer centre in Hannover city centre. Enercity then receives a single euro amount each month for the bitcoin payments made, less a standard handling fee.
“We assume there will be a lot of future development with cryptopayments and it is just a single issue in the big digitalisation challenge, which impacts all parts of our business,” the Enercity spokesperson told Engerati. “The value of the bitcoin experience was that we implemented it in our systems and combined it with the existing billing workflow. Once implemented it works and there is almost no additional effort necessary.”