Skip to main content

Prepaid Utilities: Digital Technology Makes It Consumer Friendly

March, 2020

Public utility services connected direct to homes and businesses haven’t really been around for that long. For thousands of years we paid for goods when we bought them. But when water, then gas, then electricity, then phone, were connected to our homes, a new problem appeared. How to measure and pay for what was used when you hadn’t used it yet?

The answer was to install meters, read them (by walking around with a pencil and pad) monthly and issue bills for what was used – after the fact.
Water, gas, electric and telephone service quickly became indispensable and consumers became used to paying in arrears. For decades there wasn’t much in the way of technology to do it any other way. Yes, manufacturers did introduce coin operated electric and gas meters – and in some countries still do – but for obvious reasons, they never caught on well.

In the 1980’s, technology had come far enough that it was at least feasible to install equipment that would allow a consumer to prepay for – say – electricity and have the meter disconnect when the prepaid energy was used up. This felt more like a way to penalize people who paid late and, of course, because people can die from extreme heat or cold, regulators struggled, and it never caught on.

Today however, innovative utility companies are using the MyMeter® platform to make prepay a real choice for consumers.

The data shows (and doesn’t it make sense?) that customer use less when they can prepay and measure their usage using a simple app on their phone. It becomes like the gas tank or battery meter in a car—monitor and manage the balance and then add when it gets low. This is fundamentally different from the traditional post-pay method, where the account is treated like a bar tab and the customer pays whatever has been racked up.

The big difference from 20 years ago is simply that the internet, smart meters and smart phones have made it possible to easily see one’s balance, keep an eye on usage, set alerts and top up the balance when needed.

More and more utilities are offering their customers prepaid options—like MyMeter’s® Pay-as-you-go. It’s one way the MyMeter platform creates winning scenarios all around. Consumers save money and energy and utility companies get paid faster. Costs come down for all and we all use just a little less of our precious resources.