We start with an assumption that everyone should, by now, be conversant with the workings of prepaid electricity. But just to ensure that nobody is left out, we could mention in passing that a prepaid electricity system is one where electricity users pay for electricity before actually getting to use it. They first pay for the electricity, and then make use of it – in much the same way that people usually first pay for their sugar or salt before making use of it. This is, of course, in contrast to the traditional electricity billing system, where people only get to pay for their electricity after having used it.

The exact workings of electricity vary from one implementation to another. In most cases though, it works through a voucher system, where electricity users purchase a voucher bearing a number which they then proceed to feed into the prepaid electricity meters, thereby procuring a number of electricity power units commensurate with the value of their vouchers. It is this electricity that they are then supposed to make use of, and ensure that they purchase more units of before they run out of the ones so loaded. The consequence of not purchasing more units (or ‘recharging’ as it is often referred to) would be a situation where the user eventually gets disconnected from the power grid.

This electricity system has proved to be very popular, with many people opting for it over the traditional postpaid system on the first opportunity to do so. So strong has this trend been that many power distribution companies have been forced to eventually phase out the traditional postpaid power systems in favor of the prepaid electricity systems. The electricity companies, on their parts, have also done nothing to hide their partiality to these prepaid electricity regimes.

As it turns out, the greatest motivation for this gravitation towards electricity systems is the cost advantages associated with such prepaid electricity. These are not things that can be taken lightly. There are cost advantages, significant ones, both on the user and power distributor side.

On the user’s side, we see the fact that the electricity systems make possible full control over electricity expenditure being a great attraction. People always felt that the traditional system for electricity billing tended to rob them of control over their electricity expenditure, and it comes as a great relief for them to have a system through which they have complete control over such expenditure. On the user’s side too, the prepaid electricity system comes with a considerable cost advantage. There is also the fact that prepaid electricity shields the users from the penalties that tend to arise out of late bill payments as another great attraction on the users’ side. These penalties for late payment of bills are penalties that virtually everybody on a postpaid electricity system is bound to suffer from at one time or another, seeing the logistics involved in bill payments. And talking of the actual payments, we see the electricity system being a system where payments are virtually free (it is just a matter of buying ready-made vouchers). This is not the case with postpaid electricity, where payments always come at a cost: whether that is by way of fares to the electricity company’s premises where one can make the payment, or the costs of sending checks (or doing electronic funds transfers) to the companies. Granted, these tend to be small costs, but in the long run, they can accumulate to substantial amounts; which one gets to avoid altogether by opting for prepaid electricity.