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Third party vending models

Conference: The West African Power Industry Convention
Location: Abuja, Nigeria
Presenter: Mike Stevens
Abstract: Presented by Mike Stevens at The West African Power Industry Convention

Currently there are a number of new challenges to enter the market with a prepayment solution. One of the major challenges today is to implement a customer friendly and easily accessible interface to purchase electricity from.

There is a large requirement for this interface to have the following features:

  • 24-hour accessibility
  • Convenient to the consumer
  • Easy to use
  • Readily accessible to the consumers location

Currently there are a number of third parties that provide infrastructure that can easily be enabled to perform an electricity token sale. This is a great advantage as the utility can now leverage a third party to sell electricity.

This has the following basic advantages to the utility:

  • Reduced time to set up the vending infrastructure
  • Lower operational cost to the utility
  • Enhanced service delivery to the Consumer

With this model there are a number of concepts that can be looked at in order to ensure the utility is paid for transactions. This concept is a shift from the current line of thinking whereby the utility owns the infrastructure to sell electricity tokens. With this model the operational function is outsourced to a number of areas that are currently performing this task for other similar products such as prepaid airtime.

Benefits of the Third Party Vending Model/ System
The Third Party Vending model has a number of benefits for the Utility such as:

  • Immediate access to an extensive national vending footprint
  • Guaranteed revenue collection from the 3rd party vendors
  • Enhance reporting for all vending transactions, for example what electricity has been sold in what areas and sales reports.
  • Direct reconciliation with the utilities transaction server and vending environment as well as to the merchant
  • Guaranteed settlement for all transactions
  • Full audit trail and accountability for all transactions
  • Arrears collection
  • Full online vending
  • High systems availability to ensure 24/7 vending
  • Reduced operational costs to the Utility

I believe that a successful prepayment project is one that has a clear vending strategy whereby prepaid electricity tokens can be easily and conveniently bought from the end consumer. By making prepaid electricity tokens readily available the resistance to move to prepaid becomes less or a risk to a prepayment project and consumers are more likely to embraces prepayment as it puts them in control of their budget and ensures the utility of it revenue.

Not only has this model been designed to help the consumer and the utility, but to also uplift the community as the barrier to enter the market as a prepaid electricity vendor is diminished helping to uplift the community