What was the challenge?
When British Gas needed a cost-effective and flexible over-the-counter payment solution, PayPoint was able to meet that need with its unique terminal technology, backed by robust payment management systems and processes.
In 1996, in the face of banks withdrawing their over-the counter services and with high street showrooms closing, British Gas were faced with the challenge of serving a growing pre-payment meter population when the only willing payment service provider was the Post Office.
The Post Office service was far from ideal - expensive, inflexible and closed except for normal office hours, a huge inconvenience for customers with prepayment meters needing to top up in the evenings, weekends or when they were at work. As a market leading energy and home services provider in the UK, the ability to offer flexible and convenient payment options to its customers is a core requirement of British Gas’s business.
An alternative to the Post Office service was needed to deliver customer and cost-to-serve benefits.
The Business Challenge
A lack of available payment charging outlets meant that British Gas wasn’t able to extend its prepayment coverage and serve a growing prepayment customer base how it wanted to by making it is easy as possible for a customer to purchase energy credit.
Moreover, the energy regulator was unhappy at the level of service to vulnerable customers, many of which prepay for their energy.
British Gas needed a partner that could source point of sale technology, deploy it nationally and process payments and manage settlements at scale.
Redefining the norm
Working with British Gas and other investor clients, PayPoint conceived of a branded national retail network with a multi-functional terminal for bill, budget and prepay customers.
The terminology technology – with unprecedented functionality at the time – was deployed to 8,000 carefully selected convenience stores throughout the UK, brought charging facilities closer to customers homes and workplaces than ever.
Together with longer opening hours, many prepayment customers were beginning to enjoy a much simpler and convenient energy top up experience – a hallmark of the payment services we offer today.
Supported by retail management and settlement systems built from scratch, PayPoint was able to offer British Gas, and its customers, unrivalled service levels and provide its distressed prepayment customers peace of mind through standards of service that included a 4 hour reinstatement of service in the event of a fault, 7 days a week from 7am to 11pm.
On the back of this network, British Gas were able to massively increase their deployment of gas prepayment meters and in doing so gain far greater control of payment from its lower income customers.
The network also served bill and budget customers at a fraction of Post Office costs. Retail commission rates applied each time a customer purchased energy, were reduced from 3% to only 0.5% saving British Gas millions a year. We’re proud to say that, despite a huge growth in the prepayment market and the investment needed to meet that growth, our service costs remain at an unbeatable 0.5%.
Our retail network today stands at over 27,000 outlets, meaning 99.6% of the total urban population live within one mile of a PayPoint outlet and 98.6% of the total rural population live within five miles – one of the reasons why British Gas customers rate our services with 98% customer satisfaction levels.
An extendable solution
When British Gas entered electricity market in 1997, it was able to take immediate advantage of PayPoint’s national network to grow its market share.
PayPoint has also pioneered many service extensions for British Gas to deal with other identified customer service problems. For example, the high expense of sending couriers to distressed customers with replacement keys/cards was removed by introducing an efficient service at the point-of-sale.
Rebates were enabled through adding a cash out service. These were all instances of tangible challenges for British Gas for which new solutions were invented drawing on our specialisms, subsequently delivered at scale and without customer noise.
Taking payments into the digital age
In September 2009, British Gas and PayPoint teamed up again, this time to design and implement a home vending solution for prepay meters that would allow customers to purchase energy in the comfort of their own home.
A revolutionary service at the time, PayPoint was in prime position to deliver given its proven track record in delivering innovate products and services.
From a standing start, PayPoint agreed to take on the development of the web solutions necessary to support the service, designing, building and delivering the service in just 3 months.
Again, this success was dependent on co-ordination with and management of Siemens, Itron and various technology suppliers as well as close liaison with British Gas IT to integrate the service. Commitments to the British Gas senior executive were met, a reliable service was introduced and in a short time frame grew to handle millions of transactions, with high customer approval ratings.
Given the pioneering nature of the solution, there were aspects of the service in operation that could only be learned through experience, so considerable effort went into refining the service over its first few months of operation.
Platform for the future
The real time expertise demonstrated and the underlying concept of home vending have been instrumental in our subsequent development of Head End solutions for British Gas and the new Smart Meter payment platforms we are now introducing. These will also benefit from being based on the latest technologies to allow flexible development and easy customisation to British Gas brand and service requirements.
This successful history of innovation and scale delivery for British Gas highlights a number of key facets for the prospective payments partnership.
A great partnership
Our ability to work with British Gas to identify service issues, design and deliver innovative solutions and to continually improve our implementations is typical of how we like to work with all of our clients.
We make our living by really understanding our clients, their markets, their customers and their needs and customising to deliver against these, in contrast to larger payment institutions who do not have the agility, flexibility or interest in creating intimate solutions.