Payment defaults represent an enormous financial risk for energy utilities. With a smart IoT solution, Telefónica customer Lackmann gets to the root of the problem.
The challenge: The defaulting electricity payer
Unpaid electricity bills are a very special challenge for energy utilities. This is because stricter disconnection requirements apply in the energy supply sector than in other industries. Payment defaults mean a high financial risk as well as immense personnel and administrative expenses. According to the Federal Network Agency (German: Bundesnetzagentur), almost five million threats for disconnection were issued throughout Germany in 2018. These households were in arrears of at least 100 euros. In the end, electricity was actually cut off only about 300,000 times because many utilities shied away from blocking the metering point or customers paid the bill after the disconnection threat. For both sides, disconnecting is an expensive, time-consuming as well as personally unpleasant undertaking and this can be avoided with MeterPay as a digital payment platform.
The solution: An electricity meter that thinks for the electricity payer
Heinz Lackmann GmbH & Co. KG, one of the leading system providers in metering for the energy industry, has developed an integrated complete solution in cooperation with Telefónica Deutschland that can save utilities from these problems. The smart solution is called MeterPay and is a digital payment option for electricity. Payment is made via prepaid and mobile. It is a software-as-a-service application made available from the cloud. Electricity supply is recorded and mapped in one system from metering to billing: digital electricity meters, software for measuring, controlling and paying for electricity. Energy suppliers and end customers thus receive a comprehensive digital overview of all relevant data on electricity usage.
In Telefónica Deutschland, Lackmann has found a mobile provider that is not only a reliable partner in terms of connectivity, but also supports scalable business models and attaches great importance to security and data protection. The electricity meters are connected to the MeterPay application via Telefónica’s IoT services. To ensure a secure data connection, Telefónica uses its own access point, the so-called Access Point Name (APN). The Global SIM Vivo o2 Movistar IoT SIM card offers the best possible mobile connectivity through national and international roaming. In Germany, any available mobile network can be accessed for the data connection. The IoT Connect Germany tariff also ensures that costs can be calculated transparently. For intelligent management and control of all IoT SIM cards, the solution is rounded off by the Telefónica Kite platform. Among other things, this is used to activate and deactivate the IoT SIM cards and to connect and integrate them into the Lackmann system. It assigns the SIM card to the IP address of a power meter, monitors the volume of data consumed and controls the stability of connectivity.
The result: Payment defaults are a thing of the past
Lackmann and Telefónica offer utilities the smart solution MeterPay as a complete system for prepayment of electricity consumption. Thanks to prepaid payment instead of the usual installment payments for electricity consumption, the basic suppliers do not have to make advance payments. The risk of non-payment no longer rests on their shoulders and costly power cuts are no longer necessary. The IT infrastructure of metering point operation is solved intelligently and runs precisely and stably. Not only does it open up a new payment model for energy utilities, but also innovative business models in the form of pay per use. Electrical energy can be purchased anytime and anywhere.
Customer benefits extend along the entire smart metering value chain by integrating administration, consumption metering, tariff conditions and payment processing:
- Simplified billing processes within one system in real time
- Meter usage on a pay-per-use basis
- Efficient protection against payment defaults
- Clear consumption and cost control for end customers
- Payment based on actual consumption, no additional payments at the end of the year
- Provision of various payment options such as SEPA or instant bank transfer