Prepago

Prepago, or prepaid, is a billing model in which goods or services are paid for before they are used. The purchaser loads funds onto an account, card, or SIM and spends only up to the available balance. The term is widely used in Spanish-speaking regions and is applied across several industries, including telecommunications, utilities, transportation, and retail.

In telecommunications, prepago refers to plans where calls, messages, and data are billed against a prepaid balance rather than a monthly postpaid bill. Users can buy airtime or data in increments known as top-ups or recharges, and service continues as long as credit remains. Prepaid mobile services are popular for cost control and for users without a credit history.

Other common applications include utilities, where prepaid meters deduct consumption from a loaded balance; transportation, with prepaid fare cards; and retail, where gift cards or prepaid debit cards are used for purchases. In these contexts, funds are typically non-refundable and access to service can be paused when balance is exhausted.

Advantages of prepago include budgeting control, no long-term contracts, and accessibility for users with limited or no credit history. Disadvantages may include higher effective rates, service interruptions after balance depletes, and fees for top-ups or expiration rules. Regulatory frameworks for prepago vary by country and industry, with protections addressing transparency, refunds, and anti-money laundering requirements.