Post on 15-Jan-2016
Prepayment SystemsPractical ImplicationsKeyPad vs. SmartCard
Eng. Khalid Tubaileh
MEM2005
What is Pre payment? “Pay as you go” electricity sales system Revenue collected in advance -
eliminating the complete billing system It is not a new system Newer administrative techniques are
evolving Over 5 million installations worldwide
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What is pre payment? Purchase and consume Consumption restricted to
payment Automatic disconnection on credit
expiry Buy as and when you can
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Why Pre payment? Utility’s View point
A solution that improves the revenue cycle.
Improved financial management Lower overheads. Improves management of fraud Better customer services. Better load management.
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Why Pre payment? Consumer’s Viewpoint
Improved budgeting Convenience of payment
Avoid long Q’s Choose when to pay
Confidence in the system No billing errors Improved quality of supply
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Pre payment technologies
Coin operated meters Magnetic cards Smart cards Key pad meters
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Traditional Prepayment
Coin
InexpensiveMoney easily stolenEasy to tamper or fraudExpensive to maintainRequires access to banking systemErrors subject to change with time
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Current Prepayment SystemsSimple Electric
$ 100Magnetic Card
Relatively inexpensiveAcceptance problemsNot always erasedCards often lost or damagedCards could be copiedAccountancy backup needed
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Current Prepayment Systems
SecureTokens expensiveVending hardware expensiveAcceptance problems - contacts
wear or become contaminated Requires access port in meter
smart cardSmart card
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smart cardReusable Token
No money in meter
Additional data can be transferred
The Pros and Cons of Smart Token Systems
Tokens are expensive > $ 1 each
Prone to acceptance problems
Convenient for consumers
Up 25% a year require replacing
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Dispensing Unit Meter
$£$
smart card
$Token is additional
component. Increasescomplexity of system.
Reduces reliability.
Token acceptor required.Token or token acceptor
could fail before orduring programming.
$
Token acceptor required.Permits fraud.
Meter could reject token.Token can fail, be lost
or stolen.
$
$
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smart card
If a token canget into a meter
So can anyone else!
Further Disadvantage Of Token Based SystemsIs That They Require An Aperture Into The Meter
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Traditional Token Vending
PayPointPost OfficeDe La RueA N Other
smart card
smart card
What happens if the token fails or is lost?
•How long before it is replaced?
•Who pays for its replacement?
•How does the consumer stay on supply?
•Reconciliation if in reality the consumer is attempting a fraud?
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Unfortunately Plastic Cards Are Now Seen As Cheap Throwaway Gimmicks
“On Average FraudstersAre Taking 6 Months toDefeat Each New Step inSmart Card Security.”
David Cooke, Editor Fraud WatchThe International Newsletter Covering Fraud in Financial Services
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Innovative Prepayment Systems
No tokens - reduced costsNo aperture - no token acceptance
problemCodes easily reproducible if lostCodes can be vended from many
sourcesVend Code comprises 16-20 digits
Keypad
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Comparing The technologies
smart card
Token BasedKeypad
Inexpensive Paper based token Expensive token (encapsulated ASIC)
Reproducible at any outlet if lost Token must be replaced by supplier
No token acceptor in meter Meter requires token acceptor
No token acceptor in vend outlet Vend outlet requires token acceptor
Telephone vending possible Telephone vending not possible
Internet vending possible Internet vending not possible
16-20 Digit code Convenient way to transfer credit
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Keypad Vending
Vending Stations
AVM’s24 hr Call Centre
The Internet
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Comparing The Technologies 1 Keypad
Smart Card
Ofgem Approved Yes Yes Supports Time-of-Use Tariffs Yes Yes Supports Step (Slab) Tariffs Yes Yes Supports Seasonal Tariffs Yes Yes Credit Transfer Transaction Yes Yes Negative Credit Transaction Yes Yes Price Change Transaction Yes Yes Tariff Change Transaction Yes Yes Debt Transaction Yes Yes Emergency Credit Yes Yes End Of Tenancy Yes Yes
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Comparing The Technologies 2 Keypad
Smart Card
Change Limits via Transaction Yes No Load Limiting Yes No Overload Protection Yes No Demand Side Management Yes No Multi Utility Yes No Differential Billing Yes No Historical Data Yes No
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Comparing The Technologies 3 Keypad
Smart Card
Physical Token Required No Yes Vending Possible if Token Lost Yes No Repeat of Lost Vend Possible Yes No Agency Vending Yes Yes 24 hr Call Center Vending Yes No Internet Vending Yes No Meter readings brought back Yes Yes
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Comparing The Technologies 4 Keypad
Smart Card
Detects Reverse Energy Yes Yes Detects Bypass Yes No Detects Neutral Interference Yes No Detects Switch Weld / Failure Yes No
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Prepayment Running Costs
Keypad Per 100,000
Smart Card Per 100,000
Meter Purchase Similar Similar
Token Purchase $0 $300,000
Token Replacement (Per annum)
$0 $75,000
Customer Visits $40,000* $400,000**
* 1% at $40 per visit (other issue, poor training etc.) ** 10% at $40 per visit (token related issues – lost, not working etc.)
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Questions?
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Cost Benefit AnalysisCosts
Cost of PPM - $120. Vs. Cost of conventional meter $10 Cost of incremental Investment of $110 @ 18% p.a. is $
20 Benefits
For a 100 unit consumer @ $ 1/ unit; Bill = $ 100 p.m. Saving in interest cost due to faster cash flow for 3
months @ 18% p.a.; Saving = $ 54 Saving on cost of meter reading 4 times a year @ $ 10
per reading; Saving = $ 40 Saving in Stationery and Postage and Billing
infrastructure, 4 bills @ $ 1.5 per bill; Saving = $ 6 Improvement in revenue because of better quality of
meters, @ 3%; Increased Revenue = $ 3 Total Benefits = $103 per annum