Optimising revenue on prepaid utilities can be challenging due to low margins and operational expenses incurred to effectively manage the portfolio. However, by applying smart routing strategies, banks and retailers can boost their profitability while also ensuring customer satisfaction.
Running a profitable prepaid electricity portfolio can be challenging in a market where products are commoditised and margins are low. Businesses also take into account the complexity of managing multiple relationships with service providers and the risks of losing coverage as coverage of municipalities change between providers.
Considering these challenges, prepaid electricity may appear to be unprofitable and complex to manage as part of your VAS portfolio. However, as this is a staple service within your VAS portfolio, businesses should consider optimising their commercials by using a smart routing strategy which uses a combination of preferential routing, load balancing and broadcasting to optimise profits and maintain availability.
Be purposeful with preferential routing
The preferential routing functionality enables an effective and proactive approach to maximise your commercials. To be used effectively, businesses need to critically analyse the fees agreed with all service providers as well as understand their value to the business. This is especially important when there are multiple municipalities covered by the same provider.
Preferential routing gives you the control to route transactions to your preferred provider, allowing you to optimise your commercials.
Prepare for the unexpected with broadcasting
This functionality sends a message to all providers integrated with Electrum’s Prepaid Electricity solution to benefit businesses in two ways:
- Confirming which providers support a specific meter number and all details associated with that meter, and
- Establishing alternate supported routes where a preferred provider is unavailable
Without the broadcasting functionality, you risk not being able to process the transaction. Mitigating that risk on your own would require tracking changes for each municipality and maintaining a list of meter numbers and municipalities supported by your providers. The process is onerous and can be complicated by the ever-changing landscape of municipality coverage.
Broadcasting uplifts capacity by automatically updating, managing and storing the evolving data for you. It can significantly improve your uptime by processing meters in real-time, ensuring that you never have to turn a customer away.
Overcome provider constraints with load balancing
If a service provider preference has not been set for a municipality, load balancing manages your alternate routes by directing transactions based on predetermined rules. It maintains high availability and flexibility to split volumes based on your business needs.
In the event you need to assess a new relationship, load balancing allows the business to gradually introduce volumes and assess the system health of the provider. Based on how well they perform, you can decide to direct more traffic through them or you may shift their traffic to different, healthier providers.
Focus on your value proposition
Prepaid electricity is a staple industry product and is therefore a challenge for businesses to differentiate their offering in the market. In addition, costs to maintain the portfolio reduce margins and affect the overall health of a portfolio.
To focus on building a strong value proposition through online channels and in-store point-of-sale (POS), leading banks and retailers use Electrum’s next-generation technology to manage the processing of prepaid electricity transactions. Smart routing capabilities like preferential routing, load balancing and broadcasting ensure the business’s commercials and availability are optimised while they focus on delivering the best experiences for their customers.
Contact us to learn how our robust Prepaid Electricity solution can work for your business.
