Prepayment for service

Business model term Range of prepaid service cards in a German supermarket Prepaid refers to goods and services paid for in advance. Examples include postage stamps, attorneys, tolls, public transit cards like the Greater London Oyster card, pay as you go cell phones, and stored-value cards such as gift cards and preloaded credit cards. Prepaid services and goods are sometimes targeted to marginal customers by retailers. Unlike postpaid or contract based services, prepaid accounts can be obtained with cash. As a result, they can be established by people who have minimal identification or poor credit ratings. Minors, immigrants, students, defaulters, and those on low incomes are typical prepaid customers. In accounting terms, a prepayment is treated as an asset by a buyer, and as a liability by a seller. Prepaid mobile phones Recent statistics (OECD Communications Outlook 2005) indicate that 40% of the total mobile phone market in the OECD region consists of prepaid accounts. This service was invented by Portuguese provider TMN, while researching for a means to increase penetration of mobile technology by allowing anyone to buy a fully working (usually requiring a quick and simple a