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AutoPaying your bills is incredibly convenient, but it is only half the equation. Wouldn’t you rather have that convenience AND know exactly what you were paying before you paid it?  In a recent “unscientific” survey I conducted across social media as well as direct phone interviews with utility personnel across the country regarding their own bill paying habits, it was eye-opening to hear that most respondents said that they pay over 90% of their bills online, and 35% of those bills are on AutoPay. Meaning…people willingly set aside money in their account knowing that at some date in the future that money will be taken by the payee, and therefore is not part of an available spending budget for other items. Yet, if you asked those same people if they would ever consider participating in a prepay service (e.g. prepay utility service), the majority would say No.  Why is that?

AutoPay services are really good for those situations when the amount is consistent. Most AutoPay providers provide some type of communication, usually email, to let payors know what the bill is just prior to taking the payment. If you are lucky, you can delve into the information a bit and determine if things have changed or if there are ways you can reduce the payment, but in most instances people just let it ride.  Needless to say, AutoPay wreaks havoc on bills that vary. Very little warning to customers regarding bill changes, and virtually no ability for customers to make changes in their spending or usage habits to lower their bill prior to the bill arriving. Yet, people are more willing to AutoPay than use Prepay even for bills that vary. As an industry, we have clearly missed the mark on educating the public on the advantages of prepay billing.

For all of you AutoPay users consider this…if you are using AutoPay, by default you are a believer in Prepay. You are setting aside a portion of your budget to pay a bill at a later time. Prepay users pay for a service prior to using it, and the outcome related to available budget for other expenses is exactly the same as AutoPay users. Except prepay users are much more informed and able to manage their spend more accurately. In fact, prepay users in the utility industry end up with 11% more in their pockets than AutoPay customers would…because they are aware of their usage on a daily or even hourly basis and can make adjustments, unlike AutoPay customers. Advanced Prepay providers provide a real-time mobile experience with personalized communication to customers in a streamlined fashion that allows them to minimize their time worrying about their utilities while maximizing their experience and knowledge when it comes to their usage and budget. Data has shown that prepay users engage with their utility services and applications 10X more than traditionally billed customers. And by the way, in addition to knowing exactly what they are spending without surprises, prepay customers can also maximize their convenience by auto-recharging their balance when it hits a specific threshold. They get the best of both worlds with convenience and transparency.

The utility of tomorrow is right around the corner. In fact, most are in the process of preparing for this sea change.  An environment where distributed energy resources are being employed by both users and utilities in an effort to drive towards sustainability, reduced carbon emissions, and increase network resilience. This infrastructure change combined with varying rate structures that can be dynamically selected by customers based on their usage habits means customers need to understand their usage and be engaged. If you are on AutoPay, you will likely miss out. Prepay customers will be well versed and leading the way.

A recent study conducted by the Distribute Energy Financial Group (DEFG) concluded that an overwhelming percentage of customers across multiple income levels would like their utilities to at least offer prepay as an option, but most don’t. It’s time. If your utility isn’t offering prepay or you want to find out more about it. Check out www.exceleron.com.