Solar Payments: Pay-As-You-Go
- FazipayFinancialPOSSolar
- June 6, 2023
- No Comment
- 319
One of the limitations customers face for financial services and energy access is the payment dynamics. In addition, customers in rural and low-income areas need help to connect to modern, clean energy solutions. Hence, innovation is needed to lower the bar and make these essential services accessible to the populations in remote and underserved areas.
The pay-as-you-go pricing model has become an innovative solution to enable consumers to pay as they consume the service. In addition, the easy, convenient payment option allows consumers to spread a product’s payment conveniently.
What is Pay-As-You-Go (PAYG)
The simple definition of the pay-as-you-go (PAYG) pricing model is that consumers can pay based on how much service they consume. The pricing or billing is based on usage or consumption rather than time or other variables. The pricing may be adapted to accommodate the service depending on the particular service.
A locking and the unlocking feature can be integrated into the PAYG payment structure. It enables the service to control the product if the customer defaults. As a result, last-mile consumers can now pay reasonable amounts over time. It can also allow a top-up payment structure via payment platforms.
There are two types of pay-as-you-go payment plans
The consumption-based model.
In this mode, the more consumers use a product or service, the more they pay. Examples are credit card payments, transactions, storage bandwidth, and electricity. As a result, you may not have to pay a monthly fee; you just pay per use for each transaction or service.
The credit-based model
The credit-based model uses purchased credit units for the service. You pay in advance for some service units and then use them. Then, before exhausting the credits, you can buy more.
What are the Benefits of PAYGo
Pay as you go or PAYG is growing in popularity with different benefits, including lowering the barrier of upfront pricing for solar home systems. Below are notable benefits of choosing the PAYG model.
1. Lower Upfront cost
When customers realize they can pay less initially, buying becomes more attractive. Otherwise, potential customers may feel intimidated by the subscription plans but prefer to pay for what they can use immediately. Also, customers can make a faster decision to purchase or subscribe to the service. Moreover, customers love to be in control and will embrace an opportunity to pay for only what they use.
2. Higher revenues for businesses
As against the thought that the pay-as-you-go payment system may hinder a company’s financial growth, the opposite is often observed. The PAYG model is often scalable because customer usage will likely increase for high-quality services. The more the users consume, the more money the service provider can make.
3. Learning more about customers
The service provider also has the opportunity to learn more about the customers that use the PAYG model. This payment system allows the service provider to monitor how much your customers consume the product or service. As a result, the company can prepare for future offerings, such as promos, to determine the most suitable timing and pricing. You can also rank consumers with their level of consumption and tailor marketing efforts accordingly.
4. Users with high consumption can pay more.
The pay-as-you-go model also allows some consumers to use more resources than others. The more these consumers use, the more service you need to provide and the more you can charge them. However, in a flat-rate payment system, the high-consuming users pay the same amount as every other user. The PAYG system provides fair payment for all consumers based on usage.
Disadvantages of the Pay as you go Pricing System
When you choose the pay-as-you-go pricing system, there are some disadvantages that you may have to look out for. Let us consider them.
1. PAYG can be challenging to retain customers
In a PAYG system, customers may switch to another service provider or fail to keep up with payments. As a result, sticking to a monthly subscription can take time and effort. However, a solution is to offer a discount to customers who pay annually rather than monthly.
2. Revenues can be unpredictable.
On the part of the company, it may be difficult to predict the expected revenue of most of your customers on the PAYG model. You may need to determine whether these customers will renew their next month’s subscription. Again, the yearly subscription or a shorter repayment period can solve this problem if the difference is clear to the consumer.
3. Pay-as-you-go may be complex to set up and manage.
Calculating payments using a flat-rate model is more manageable than a PAYG model. However, on the part of the consumer and the service provider, there may be complications in calculating the due payment for a consumer. In addition, it becomes much more complicated if the consumer changes the payment plan or payment conditions.
How the PAYGo works
The PAYG payment system is a technology that allows end users of a service to pay reasonable amounts over a period. It will require additional setup from the service provider or a token-based system where the consumer only pays for what they use. The token in the PAYG system could also be accessed via a mobile money payment platform or through a designated vendor. Payments could be monthly or weekly, but once the customer defaults, the service provider could cut off the service. PAYG is also very affordable and flexible because the consumers can link up with their savings or current income accounts.
What is the Solar pay-as-you-go?
As for buying solar products that are on PAYG plans, the plan is simple, easy, and flexible. When you identify the product, you want to buy from the FaziPay Solar store, add it to the cart and click on checkout.
You will get to the payment page, where you select your preferred payment option. Then choose PayGo and select next. Then, fill out a form with details of your preferred duration, delivery address, and other information. After that, our customer service agent will contact you.
After completing the PAYG process, you make the initial payment, and we deliver the product to your doorstep via DHL. Ensure that the product you pick is available for the PAYG payment plan. If you need help, you can pick a different product that supports the pay-as-you-go payment model.
If you need more help picking a product or finding the right solar product, send us an email via solarsales@infibranches.com.