Nowadays, in some countries, electricity users have the option of either being put on the prepaid or the postpaid electricity-supply regimes. The terms are quite self explanatory. When we talk about prepaid electricity, what we will be looking at is the regime where electricity users pay in advance for their electricity usage. On the other hand, when we talk about postpaid electricity, what we will be talking about is the regime where electricity users pay for their electricity after having used it.

The way prepaid electricity-supply works is that the users buy special number-bearing cards, which they then proceed to load onto their smart electricity meters, thereby procuring a number of kilowatt-hours congruent to the value of the cards. They then use the electricity so purchased, and update their accounts (by purchasing another card) when they feel that their balance is running low and they are at risk of being cut off from the grid. There are, however, some jurisdictions where these smart cards are not used. What happens in such jurisdictions is that a person simply goes to electricity supply company’s offices, make a payment there, which is then loaded onto his or her account; thence procuring him or her a given number of electricity units. The impetus then falls on him or her to keep checking the falling balance on his or her electricity meter, and then make an effort to load more money into the account before the earlier amount runs out.

The way postpaid electricity works, on the other hand, is that a meter for electricity usage is installed in the user’s premises, with a usage bill accumulating as the user makes use of the electricity. The bill is then send periodically (say monthly), and the user required to pay for it, in order to continue being supplied with electricity.

Both the prepaid and postpaid electricity supply systems come with an upside and a downside to them.

The upside to the prepaid electricity-supply system arises from the expenditure control it makes possible, as well as its convenience, and the fact that using it, one is immune from late bill repayment penalties. There is also the fact that, typically, no deposits are required in postpaid electricity supply systems.

The downside to the prepaid electricity-supply system arises from the fact that it exposes its users to major inconveniences, in case of them forgetting to buy electricity supply units in good time. Some people also feel that going looking for electricity supply scratch cards is too inconvenient a job – though, thankfully, most electricity supply companies have nowadays created systems where the units can be purchased online or through the phone.