Pre-paid Electricity. A look at Eskom in South Africa

While visiting a friend’s apartment during a recent trip to South Africa he made a comment that baffled me. “Looks like my electricity is running low” I asked what he meant and he told me about the pre-paid electricity billing system he and most people use. I figured it would be interesting to learn more about this pre-paid electric billing system in use in South Africa relative to regular post paid billing systems in the US.




Eskom is the main power company in South Africa. They currently offer the prepayment option to about 3.5 million domestic customers. I am not sure what percentage of the installed base this number represents.

Here is how it works in a nutshell.

1. Eskom installs a prepaid power meter in your house or apartment if you receive electricity directly from Eskom. If not, the municipality supplying the electricity provides the meter
2. If you want to install your own meter, you can purchase one directly from the manufacturer and use an electrician to install it in your dwelling.
3. Once the meter is installed and your account set up, you will be provided with a plastic meter card, which looks like a credit card.
4. Use your plastic meter card at electric prepayment vending machines to load your account with energy credits, measured in the local currency – Rands. These vending machines are typically located in major shopping and residential areas
5. Once your card / account is loaded with credits, swipe the card (like a credit card swipe) in a slot on the power meter. This activates the meter, which begins the flow of electricity to your dwelling. The electricity flows until the credits are exhausted.

This pre-paid electric billing option does not really provide any cost savings. There is a mention of peak vs. off peak rates for billing of electricity, however these rates match those of the post-paid product.

Key advantages of the pre-paid billing option are providing consumers the ability to track their usage and it simplifies billing.

The pre-paid electric meter shows ones balance as electricity is used, and some models even have a light, which flashes rapidly as more electricity is used.

I think this is a very innovative option to give consumers the ability to better manage their utility costs. We come from a convenience culture with rising energy costs and a desire to better manage our energy spending, such a pre-paid option for electric billing may not necessarily be such a bad idea.