ATM and Payment Technologies


Both Eskom and Municipalities distribute Pre-Paid Electricity tokens via Third Party Vendors.

South Africa is rapidly moving from “post-paid” electricity to the pre-paid Electricity model due to the fact that there is better control and a huge reduction in unpaid billings. Major success has been achieved by rolling out pre-paid meters in the entire Western Cape, much of Ekurhuleni and other Municipalities by utilising pre-paid metering for payment of electricity consumption.

The labour and cost intensive demands of post-paid electricity systems for municipalities’ e.g. accounting, infrastructure is a huge burden and most South Africans have difficulty accessing payment facilities. Consequently there are settlement delays and losses.

Logistically, it is difficult and expensive to maintain post-paid meter reading procedures. There is also substantial fraud and tampering with conventional meter reading.

There is also a lack of skilled regional and rural management at the utilities. Consequently, bad debt and lack of accurate credit management has incurred huge financial losses for local government and Eskom. Further to that there are misconceptions that “post-paid” consumers? accounts are sometimes used to contribute towards losses incurred by non-paying consumers.

The 8-Point Distribution System Overview
The distribution methodology is divided into 4 main steps:
• Merchant Request for Token
• Merchant Information Confirmation
• Token Request
• End user (consumer) receives PIN

1. Token request from end user/resident
Handing over the required cash, with a uniquely numbered magnetic swipe card (for their home pre-paid electricity meter provided by the Utility), end users or consumers request purchase of pre-paid electricity vouchers from any retail outlet, such as a petrol station, that has our EPOS terminal available. The merchant/ cashier swipes the card through the terminal reader from which secure, pre-paid electricity vouchers may be sold.

2. Merchant credit check
The merchant has a virtual credit account with PayPoint managed by our billing system and switch, that our EPOS terminal at the merchant’s site in turn links to via GPRS.
When our merchant deposits money in a PayPoint bank account, our automated system (monitored by financial staff) credits the relevant virtual merchant account utilising a unique reference number. This enables the merchant to draw against that account, each time his outlet requests a virtual pre-paid voucher, until such time as that credit is consumed.
The terminal will first check whether the merchant has sufficient credit with us, by connecting to the central back office billing system and should their credit be sufficient the terminal will request confirmation to purchase a token “PIN” for a specified value.

3. PayPoint Credit Check on Supplier Server
PayPoint?s back office switch subsequently communicates via a VPN (secure virtual private network) linked to the ESKOM back office server that checks whether PayPoint has sufficient credit deposited with ESKOM (as would any other Utility server, such as a Municipality).

If PayPoint’s credit is verified as sufficient, the Utility back office server continues the transaction.

4. Info Confirmation
The consumer’s ‘swipe card’ has the following information on the magnetic stripe in electronic format:

o Home meter number

This is to save ‘punching’ the Pre-Paid meter number into the Terminal before connecting to the back office Server. There the server has the Consumer’s ‘profile’ with such information as:

o Consumer name and address
o Account info
o Any Arrears
o If so, percentage or amounts to be deducted from pre-payment vouchers requested. [This is loaded on the consumer’s profile at the Utility back office server, usually negotiated by the consumer/ Debtor]

When the merchant’s cashier swipes a consumer’s card, the EPOS terminal collects the meter number with the voucher value requested and sends it up to the Utility back office server.

The Utility server will verify information received from the terminal, add the ‘profile’ information and return it for confirmation by the consumer.

As the consumer verifies their information and requested transaction, the terminal sends confirmation to the Utility to proceed with the generation and transmission of a token PIN.

5. PayPoint Credit Reduction at ESKOM or Utility (Municipal) Back Office
The Utility Back Office Server and Billing System receives the customer’s home meter number and requested token value, debits PayPoint’s account held with the Utility, and builds a unique, secure, encrypted 13-digit recharge PIN in “real time, on-line” which is relayed back to the merchant POS terminal for printing on a pre-paid recharge voucher token.

6. Merchant Credit Reduction from PayPoint Back Office
The same transaction value, less a small discount is deducted from the merchant account profile on PayPoint?s Back Office and Billing System

7. End user receives receipt
The terminal prints the prescribed transaction voucher incorporating the encrypted 13-digit recharge PIN number there-on, which is handed over to the consumer.

8. Consumer Inserts Token Voucher PIN for Home Meter
The consumer or end user ‘punches’ the voucher “PIN” on the home pre-paid meter keypad, thus enabling an electricity recharge equivalent to the amount purchased.

Every recharge “PIN” generated at the Utility is unique and can only activate a specified home meter.
This procedure is required as every pre-paid meter has a dedicated unique serial number for security and monitoring reasons.

The system can also collect on arrears. For example; should the consumer owe the municipality any outstanding monies (for Rates, Taxes or, a previous post paid Electricity account), the system will deduct a small portion of that monetary value from the Pre-paid token and re-allocate it against the arrears e.g. the consumer purchases a R100 token but only receives R80 value as R20 may be allocated to an arrears account (usually by arrangement) towards settlement of the debt.



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