Topping up is arguably the most important process to get right for prepaid utility customers. It’s something they do several times a month. It’s essential for staying on supply. And people want it to be as easy and convenient as possible. Make recharging a really good user experience, and your customers will love prepaid. This post looks at seven top-up innovations that could help do just that.
Where’s innovation happening?
There are three broad areas of innovation relating to top-up processes:
Making more flexible use of stored value – These days people store money in many different ways, including cash, bank accounts, mobile wallets, prepaid debit cards, mobile airtime, and of course on their prepaid utility balance. There is innovation around giving consumers more flexibility to convert a wider range of stored money into prepaid energy credit. Examples include using mobile airtime to buy power, and implementing a ‘single wallet’ (or balance) for multiple prepaid fuels.
Multi-channel payments and channel modernisation – There is a significant trend towards multi-channel payments for prepaid utility service, with the ultimate goal of enabling anytime, anywhere payments using any virtually any source of money. Other innovations focus on payment automation and modernising existing payment channels.
Modernising the process of updating the user’s prepaid balance – Thick prepayment metering systems rely on the consumer to update the meter balance with the credit they’ve purchased using a key, card or voucher code. There is some innovation around modernising this process, for example using short-range wireless technologies to transfer credit from the key or smart card to the meter. Advanced metering infrastructure (AMI) automates this process entirely, so that the user’s balance is updated remotely once the top-up purchase is authorised.
#1 Single wallet for dual-fuel accounts
With key and smart card prepayment systems, customers have separate top-up devices for their electricity and gas meters, and they can’t transfer credit from one meter to another. Customers are used to this arrangement, but there may be times when they find themselves inconvenienced by having a depleted balance for one fuel and credit for the other.
In the smart meter prepayment world, it’s feasible to have a single ‘wallet’ covering both fuels, provided the customer uses the same supplier for electricity and gas. Customers can still track their usage for each fuel separately, but they no longer need to worry about maintaining two separate balances.
This approach means customers’ funds can be applied where they are needed and they won’t be left with stranded value on one meter that they cannot put towards another fuel. Having this extra flexibility could really help customers who are experiencing short-term cash-flow issues, and even at times make the difference between staying on supply and getting disconnected.
The single wallet concept is emerging in the UK – where many households are connected to both mains gas and electricity – as the energy retailers start to define their smart pay as you go (PAYG) services. One of the largest independents, OVO Energy, was the first UK supplier to offer a single wallet for dual fuels, as part of its Smart PAYG+ tariff. E.ON’s Smart PAYG pilot is also trialling a similar approach.
#2 Using mobile airtime to buy prepaid power
Mobile network infrastructure is extensively deployed worldwide, reaching billions of people and providing coverage of many rural areas. Utilities can take advantage of this well-developed infrastructure to improve their services.
One way utilities can deliver better prepaid services is by piggy-backing on the already mature prepaid mobile top-up infrastructure, so that mobile phone users can convert airtime into prepaid electricity credit.
With solutions of this type, customers can reload their electricity balance from their mobile handsets by sending a text including their meter number and the amount of electricity they require. The payment is then deducted from their airtime balance. The customer receives an SMS containing the top-up code, which they can enter via the meter’s keypad to update their prepaid electric balance.
There can be substantial convenience benefits for customers from this facility, including the freedom to top up round the clock, as well as avoiding journeys to payment locations or long queues at utility offices.
Solutions of this type involve partnerships between the utility company, a local mobile network operator (usually the one with the most extensive footprint) and its technology providers.
One recent example in Papua New Guinea saw the state utility partner with mobile network operator Digicel to extend the functionality of the mobile prepaid system to support electricity vending. The solution leverages Redknee’s convergent real-time billing platform. The new top-up channel has made a real difference to PNG Power’s electricity customers in rural areas, who previously had to make long journeys to vending locations that were only open during the working day.
#3 Smartphone apps
Many utilities are taking advantage of the rapidly rising levels of smartphone ownership globally to introduce apps for bill payment, prepaid account management, and energy monitoring. These powerful mobile devices are often central to their owners’ daily lives, and are increasingly being used for transactional purposes, such as shopping online and banking.
In the US, it’s already common for prepaid electricity programs to offer an option of topping up using an app, alongside other payment channels such as online, over the phone, text messaging, or in person at a utility office or local store.
Mobile apps are also rapidly becoming de rigueur for smart PAYG in the UK. OVO Energy has set the bar high with the launch of a feature-rich app to accompany its Smart PAYG+ plan. This enables customers to manage their accounts and monitor their usage, as well as top up. They can also check how long their credit might last, configure their communications and balance alert preferences, and set up automatic payments.
Utilita, an independent supplier that has pioneered using smart meters for prepayment in the UK, has also recently launched a mobile top-up app, as part of its implementation of PayPoint’s new multi-channel smart meter payments solution. British Gas and E.ON are also trialling apps in their smart PAYG pilots. British Gas has had positive feedback for its smart PAYG app, which it says is the preferred top-up channel for many participants in the pilot.
Mobile apps don’t have to be just for smart meter prepayment services. They can also add convenience to keypad prepaid metering systems, where customers enter a numeric vending code using the meter’s keypad to upload their credit. This type of system can support multiple vending channels, including local stores, ATM, online, text messaging and smartphone payments, with the user in each case receiving a receipt displaying the top-up code.
Northern Ireland’s incumbent power company, Power NI, has a mobile app that can be used to buy credit for keypad prepayment meters, as well as for postpaid bill payment. The app has a high approval score, with 92% of customers rating it either ‘excellent’ or ‘good’. Just over half of Power NI’s domestic customers use keypad prepayment meters (53%).
#4 Automated payments
Automated payments allow customers to schedule top-ups to fit in with their lifestyles. Customers can define the rules that trigger the payments, as well as the value that’s recharged and the bank account or debit/credit card that will fund the payment. If they find their circumstances change and the arrangements no longer suit them, then they can easily redefine the rules.
Automated payments come in two main flavours:
(1) Event-driven payments, such as when the user’s balance falls below a certain threshold or when extreme weather is forecast.
(2) Recurrent payments that follow a set schedule – e.g. every Friday, on the third Monday of each month, for example to coincide with salary or pension pay-dates.
Automated payments help put customers in control, so that top-ups happen effortlessly just when they want them. Once the payments have been set up, customers can rest assured that their prepaid energy balances are being regularly funded, and that they are mitigating the risk of unexpected disconnection. Auto payments also help the utility reduce spikes in demand for service at their offices or call centres on days of the week when their customers most often top up.
A word of caution, however. While the safety-net created by automated payments helps to remove one of the most significant barriers to the consumer acceptance of prepayment – the fear of unexpectedly losing supply – there could be downside. A study of 16 years of billing records from one South Carolina utility concluded that residential customers who use automatic bill payment consume 4-6% more energy than those who don’t. Any comparable effect for prepaid service could erode much of the energy saving benefits that using prepayment has so far consistently been shown to bring.
#5 Smarter cash payments
A feature of Utilita’s new mobile top-up app that caught our eye is the scannable bar code generator, which creates unique bar codes that the cashier scans at PayPoint locations when the customer goes to top up using cash. The bar code substitutes for the meter top-up cards that the customer otherwise has to present for making cash payments, and contains the unique meter identifier that ensures credit is applied automatically to the correct smart meter.
With this facility, customers don’t need to remember to take their meter top-up cards with them when they go to the shops. All they need is their smartphone. These devices, which are now owned by two-thirds of UK adults, have become so interwoven in many people’s daily lives that they are unlikely to leave home without them.
Perhaps unsurprisingly, the cash payment app feature is the brainchild of PayPoint, whose UK retail network comprises over 28,000 locations used for making utility prepayments, among other transactions. PayPoint believes many people will carry on topping up with cash even when online and other channels are available, and wants to improve the customer’s experience of paying this way by using the latest technology. The bar code generator within the app is part of PayPoint’s broader multi-channel smart meter payment solution.
PayPoint isn’t alone in looking to modernise cash payments for prepaid utility customers. In the US, PayGo is offering a similar facility, marketed as CheckOut By PayGo, as part of its prepay payment platform for utilities. The patent-pending solution uses bar codes on mobile apps, printed statements or other media to give customers a more convenient way of paying in cash at retail outlets. This enhancement to PayGo’s prepaid platform leverages the Cashtie solution from financial technology firm InComm. According to PayGo, cash is a significant means of payment, used by 20-50% of utility prepayment customers.
#6 USB device solution for online top-ups
This solution brings the convenience of home top-ups to customers on key or smart card prepayment meters. The customer inserts their meter key or card into a USB top-up device plugged into a laptop or PC. The customer can then go online to their retailer’s self-service portal to top up the meter key/card using a bank card. Once the payment is authorised, the credit is transferred onto the key or card, which is then inserted into the meter in the usual way to upload the new credit.
For key or card prepayment systems, the solution is a big step forward in terms of convenience, as customers can avoid making trips to their local store to recharge their meter top-up devices and are no longer restricted to shop opening hours. The convenience of home top-ups could also potentially help people with limited mobility who struggle to leave the house to stay on supply for longer.
One downside is that the solution relies on the customer maintaining a home Internet connection and on that connection being reliable when needed. There is also a risk of the customer losing or accidentally damaging the USB device. But these risks are relatively small and are largely outweighed by the customer benefits.
In the UK, British Gas has offered its prepayment customers this service (Home Energy Top Up) for some time, using a bespoke solution developed by PayPoint. Another of the Big 6 energy companies, ScottishPower, also uses a similar system for electricity prepayment. These will both eventually be superseded by smart PAYG services incorporating multiple payment channels.
#7 Contactless meter top-ups with NFC
Itron made some noise last year with the launch of its Centian prepayment meter, which enables contactless balance updates using a short-range wireless technology called Near Field Communications (NFC). Centian is also the first STS-compliant meter to offer currency transfer and time-of-use tariffs in the same package.
Consumers can wirelessly update their balance with credit they’ve purchased by holding their NFC-enabled smart card close to the meter, instead of entering an STS code. This is quicker and more convenient for customers, and less prone to human error than manually keying in a very long numeric code.
While all customers will have a smart card, Centian meters are also designed to support contactless balance updates from NFC-enabled smartphones. Many smartphone models from all the major device manufacturers, including Apple, BlackBerry, Google, HTC, Huawei, Nokia and Samsung, already incorporate NFC technology and support is increasing all the time.
NFC offers a secure solution for wireless data transfer, using both encryption and secure channels for the data transmission. The technology’s short operational range of just a few centimetres also provides inherent security, as it reduces the opportunity for eavesdropping.
Itron is marketing Centian in Asia, Sub-Saharan African and Eastern Europe.
Actions for utilities
(1) Develop a roadmap for implementing multi-channel payments. There may be quick wins from enabling mobile top-ups, which free up customers to make anytime, anywhere purchases.
(2) Analyse how customers are using the existing top-up channels and why, to identify areas for improvement and development.
(3) Look at emerging trends in consumer preferences for storing money to identify new payment channels that your customers may want in future.
(4) Cash payments aren’t going away in a hurry, so don’t forget to modernise these too.
(5) If energy conservation is a key goal, do a pilot to study the impact of automated payments on consumption among prepaid users.
(6) Investigate opportunities for new self-care payment options, which can both increase customer satisfaction and reduce operational costs.