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Prepayment is a commercial strategy which allows the use of services to more closely match the economic capacity of consumers. This model is believed to have started in South Africa in the 80’s, however it has since expanded into other countries such as the United States, the United Kingdom, Argentina, Colombia, Australia and the Philippines. Today, the prepaid business model is showing constant growth, not only in the electricity industry but also venturing into water and gas.
In South Africa, there are currently 4 million users of prepaid electricity. In the United States, prepaid electricity is still a relatively new concept, however, with the current rate of adoption, it is expected that there will be 2.62 million American electricity users on prepayment options by 2021.
Prepayment is already moving quickly in the electricity industry and is starting to get a foothold in the water and gas industries as well. This is the beginning of an important business trend that is helping utilities to improve their position in the market through increased customer satisfaction, as well as reducing their operating costs for activities such as meter readings, invoicing and the suspension of service. Prepaid, by definition, requires users to pay before using the service, thereby preventing the accumulation of debt and reducing the financial burden of debt write-offs.
Service providers need to make use of this business opportunity in order to streamline customer-facing processes and reduce non-operational losses. The key for moving forward with prepayment processes is to invest in a specialized and well-integrated solution which combines specific industry knowledge with the flexibility to adapt to the unique needs of each business.
The majority of prepayment solutions cover the main processes such as sale, administration of top-ups and the control of consumption, but they fall short of providing full support to related customer care and billing services; this support ends up being provided by independent platforms when it really should be integrated into the principal software solution. Without a unified system, the lack of cohesion between commercial processes impairs informed decision-making and reduces operational efficiency.
In order to ensure comprehensive and well-integrated management of a prepayment strategy, it is vital that the chosen software solution supports all the necessary commercial activities:
With a prepayment strategy, service providers are alleviated from the burden of dealing with bad debt, while consumers benefit from the certainty of only using as much as they can afford; it becomes easier than ever to provide attractive and personalized offers to clients through online prepaid platforms. With the right tools in place, your company will be poised to re-invent itself with prepayment programs and begin enjoying the benefits of this growing commercial strategy.
 Prepaid Energy Hub, http://prepaidenergyhub.com/new-study-forecasts-2-62m-us-prepaid-electric-customers-2021/