How does ATEC's PAYGO work?
We often get the question ‘how does PAYGO actually work with your stoves?’ The purpose of this blog is to give some detailed explanation of how PAYGO really works, what technology is involved, and what third parties are required. ATEC has patented PAYGO integrations with both our biogas and eCook products. As they differ, for simplicity in this article we will focus just on eCook stoves.
Firstly let’s strip back what pay-as-you-go (PAYGO) means. PAYGO allows ATEC to enter into financial contracts directly with customers without the need for microfinance banks or other third party lending institutions. This removes a significant friction point in the sales process of our products. Customers make periodic, generally monthly, instalment payments back to ATEC for a set number of months until they fully own their stove. There is no interest to be paid by the customer and no collateral taken by ATEC.
Overall PAYGO is great for end users but does create a risk to ATEC in terms of customer defaults. Therefore it is important that PAYGO products have a mechanism to cease functioning should customers not make agreed payments. This mechanism encourages good payment behaviour as well as demonstrating to other prospective customers that non-payments will result in their systems shutting down.
PAYGO companies typically partner with Mobile Money companies in regards to the payment gateway for customers. That’s not to say other payment options such as credit card, paypal, bank transfer etc can’t be implemented by PAYGO companies.
The saving generated by switching to PAYGO products, eg savings on LPG, can then be used towards the monthly instalment payments.
So what third party partners are required for PAYGO sales?
Firstly the payment collection provider, eg Mobile Money company as mentioned above. In order to scale in solving clean cooking, ATEC doesn’t want to be in the frontline business of manually collecting cash payments from customers every month so it is imperative that simple, easy payment options are provided to customers. In Cambodia ATEC partner with Wing Money and in Bangladesh we pattern with bKash. Customers make their payments via either in-person agents, mobile applications or even USSD codes.
Secondly a PAYGO platform provider is required. ATEC partner with Angaza but there are other options such as Solaris, Paygee, Bboxx Pulse. Angaza provides the PAYGO intellectual property and expertise. Each PAYGO device is allocated a 9 digit unique Angaza ID. Angaza provide ATEC access to an online dashboard, or Hub, where all of our accounts can be reviewed. When payments are made by customers, credit is added onto their stove. Angaza also is involved in the design of our eCook stoves in terms of ensuring appropriate PAYGO hardware and software are designed and integrated within the stove.
The third key partner is our stove manufacturer. They are responsible for manufacturing the stove, which has custom hardware and software, to the design specifications. The most important part within the stove is the Printed Circuit Board (PCB). The PCB contains the PAYGO microcontroller (small computer that controls PAYGO functions), microcontroller for the actual stove (small computer that controls heat levels, child lock etc) and the GSM hardware (Sim card and GSM module).
So how do all of these three third parties come together to provide a optimal customer experience and reliability for ATEC?
Firstly, the payments made by customers need to be registered on the Angaza Hub. We don’t want to do this manually every time therefore an API integration is done between our Mobile Money partners and Angaza. Each customer uses their 9 digit Angaza ID as a customer reference number (CRN) when making payment. Provided their CRN is correct then their payment is accepted and automatically registered in Angaza’s Hub.
So the payment is registered on the Hub, how is it then loaded onto the stove?
This can be done in two ways. The first being an automatic update on the stove via the GSM Sim within the stove. Angaza can send a data packet to the PAYGO microcontroller within the stove via GSM which will then automatically update the stove’s credit. In areas of poor mobile coverage a unique, 14 digit, one-time keycode generated by Angaza can be provided to customers, generally via automated SMS. This keycode can be manually entered into the stove by the customer using the stove keys.
Not only does the GSM connection allow for Angaza to send messages to the stove updating credit, it also allows the stove to transmit data to Angaza, eg power consumption, location, unit health warnings etc. ATEC can then collate this data for each customer and use for service after sales, carbon credits and other market analysis.
So what happens when the stove runs out of credit?
When the credit on the stove reaches 0 days the stove will stop working. The PAYGO microcontroller will communicate with the stove microcontroller and block the functions of the normal stove keys, eg power on, heat levels etc.
To make our PAYGO eCook stoves a reliable, easy to use product we rely on strong partnerships with our relevant providers in the areas of Mobile Money, PAYGO backend and product manufacturing. With all three of these stakeholders involved in the process and integrated where required it results in a high quality experience for the end user.
This blog post was written by Lachlan Harris, ATEC's Lead Engineer.
