Everybody's talking prepay – but what's the point?

Last week we ran a news piece about SmartSynch providing a prepayment option for utilities to offer customers through an agreement with prepaid electric provider PayGo. The PayGo software will be embedded in SmartSynch's smart meters which will allow utilities to offer the service to customers without the expense of reconfiguring existing billing and related systems.

 

If you realize that Wal-Mart is the world's largest reseller of cellular minutes (via prepay cards), then you realize the long-term potential for the kinds of prepaid electrical services we're talking about here. Still, we're told that adoption of prepaid electric service in the U.S. is extremely low—less than 1%.

 

Yet SmartSynch says as many as 40% of U.S. electric utilities are thinking about offering the service. Studies showing that prepay customers typically use 10-15% less electricity could have something to do with that.

EcoAlign, a strategic marketing firm, released results from a consumer prepay survey  examining customer perceptions and expectations of a voluntary prepay option offered to consumers by local utilities. According to the company, a core group of consumers (17%) are “extremely interested” or “very interested” in a voluntary prepay option offered by their local utility. Another 25% of consumers indicated that they were “interested” or “somewhat interested.” That leaves 46% of respondents were “not interested at all” in a voluntary prepay option offered by the local utility.

So where does that leave us? Does it make sense to promote prepay to utility customers? And what's the smart way to do that? It's what we're talking about in our Tuesday Topic forum right now. Hope you'll join us!

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