An introduction to prepayment - Conlog

Bringing power tothe peopleElectricity prepayment has been in existence formany decades, however it was only in the late1980s, with the development of the numeric andelectronic transfer of credit, that the industry wasrevolutionised.Prior to this, many prepayment solutions were basedon coin-operated machines, whereby the user inserteda coin into the machine and received electricity.Naturally this created a number of problems for theutility, not least tampering, as well as having to visit thevarious premises to empty the coins.However, the basic premise remains the same,whereby a consumer purchases their electricity needsin advance of consumption.Whilst the concept is simple, the technologicaladvances in the industry have enabled the adoptionof a wide variety of new methodologies, which hasimproved the service offering to both utilities and theirconsumers.How prepayment worksIn deploying a prepayment project, there are threefundamental components the utility needs to purchase.First, the prepayment electricity meter which isinstalled in the consumer’s premises. Next is thevending equipment, to enable consumers to purchaseelectricity, which should also be located near to theconsumers; and lastly a management system within theutility offices, to ensure complete financial control overthe project.The process thereafter is easy:> A Conlog prepayment meter is installed in theconsumers property.> The consumer needs to purchase electricity.This can be done by visiting a vendingoutlet, purchasing through the internet, or byredeeming a token via SMS.> The consumer will receive a 20-digit number,more commonly called a token.> This token is entered into the meter, via thekeypad.> This loads the purchased amount of electricityinto the meter and the consumer enjoys anelectricity supply.> When the credit is depleted, the customer simplypurchases a new token.> If a new token is not purchased, the electricityis suspended until a new token is entered intothe meter.A world of benefitsThe primary benefit for utilities is improved cashflow,as payment is received upfront from consumers. Inaddition, as there is no credit facility provided, there iszero consumer debt. Utilities can also enjoy reducedcosts as prepayment provides for a simpler andcheaper revenue collection cycle, which no longerrequires meter reading or accounts to be distributedeach month.ConlogP O Box 2332, Durban, 4000, South AfricaTel +27 (31) 268-1111 Fax +27 (31) 268-1500http://www.conlog.co.zainfo@conlog.co.za