Prepaid Billing System and Customer Satisfaction in Water Service Delivery in Uganda: Evidence from Bushenyi Ishaka Municipality

Introduction

The provision of essential utility services, particularly water, is a critical component of public health and economic development. In developing economies, utility providers face the persistent challenge of achieving financial sustainability while maintaining high levels of customer satisfaction and expanding service coverage (Tortajada, 2020). Traditional post-paid billing systems, often characterized by estimated readings, billing inaccuracies, and revenue collection inefficiencies, have frequently been a source of customer discontent and operational strain (Kingdom, Liemberger, & Marin, 2006). In response, prepaid billing metering systems have emerged as a transformative innovation, promising enhanced revenue assurance for providers and purportedly granting customers greater autonomy and control over their consumption and expenditure (Marin, 2009).

Globally, empirical studies, particularly in the telecommunications and energy sectors, have indicated a positive correlation between prepaid systems and customer satisfaction, attributing this to factors like transparency, predictability, and perceived financial control (Sharma & Gupta, 2023; Johnson & Lee, 2022). However, the transposition of these findings to the water sector in specific Sub-Saharan African contexts remains underexplored and cannot be assumed. Existing literature reveals significant gaps: while studies confirm general satisfaction drivers, they often fail to account for the profound influence of local infrastructural challenges, socioeconomic disparities, and digital literacy levels on the customer experience (Garcia & Thomas, 2021; Kamau & Wanjiru, 2023). Furthermore, there is a scarcity of research that theoretically grounds the psychological mechanisms underpinning customer adoption and satisfaction with these systems.

This study, therefore, seeks to address these gaps by investigating the impact of prepaid billing systems on customer satisfaction within the unique operational context of the National Water and Sewerage Corporation (NWSC) in Uganda. The research is theoretically anchored in the Theory of Planned Behavior (TPB) (Ajzen, 1991), which provides a robust framework for examining how customers’ behavioral beliefs (attitudes towards control and transparency), normative beliefs (social influences), and control beliefs (perceived ease of use) shape their satisfaction intentions and outcomes. By employing a quantitative methodology, this study aims to not only quantify the relationship between prepaid system adoption and customer satisfaction but also to contribute a nuanced, theoretically-informed understanding of the determinants of this relationship. The findings are expected to provide actionable insights for NWSC and similar utilities in the Global South, guiding the strategic, customer-centric implementation of prepaid technologies to achieve dual goals of operational efficiency and enhanced consumer welfare.

Theoretical review

The study was guided by Theory of Planned Behavior (TPB) developed by Icek Ajzen (1991), posits that individual behavior is guided by three kinds of considerations: behavioral beliefs, normative beliefs, and control beliefs. In the context of prepaid billing, this theory can be applied to understand how customers’ attitudes towards prepaid systems, the influence of social norms, and their perceived control over their payment options impact their satisfaction. According to TPB, if customers believe that prepaid billing systems offer greater control and financial management, and if such beliefs are supported by social norms and practical ease, their satisfaction is likely to increase.

Ajzen’s TPB has been extensively used to understand consumer behavior and decision-making. For instance, Taylor and Todd (1995) applied TPB to technology adoption, demonstrating that perceived ease of use and perceived control significantly impact user satisfaction. Applying this to prepaid billing, the theory helped in understanding how customers’ perceptions of control and convenience influence their overall satisfaction with the billing system.

Furthermore, TPB emphasizes the predictive power of intention as a determinant of actual behavior. In billing systems, customers who have the intention to adopt prepaid services are influenced by their attitudes (such as seeing the system as convenient), social pressures (such as recommendations from peers or community norms), and their perceived ability to use the system effectively (such as mobile payment literacy). Scholars such as Armitage and Conner (2001) have confirmed the robustness of TPB in predicting customer behaviors across health, education, and technology sectors. This suggests that TPB remains highly relevant in utility service contexts like water billing, where customer satisfaction is shaped by both personal control and social environments. In the context of Uganda’s NWSC, TPB can guide understanding of how customers form attitudes towards new billing technologies, how peer influence shapes adoption, and how barriers such as lack of awareness or digital illiteracy can affect satisfaction outcomes. Thus, TPB offers both a theoretical and practical framework for predicting and improving customer behavior in prepaid billing systems.

Empirical literature review

Prepaid billing systems have become increasingly popular due to their ability to offer customers enhanced control over their expenses and improve satisfaction across various sectors. Globally, Sharma and Gupta (2023) explored the impact of prepaid billing systems on customer satisfaction within the telecommunications industry. Their study revealed that prepaid billing systems provide customers with greater control over their spending and reduce the risk of unexpected charges. This control leads to higher satisfaction levels as customers appreciate the predictability and transparency of their expenses. Sharma and Gupta emphasize that the alignment of prepaid systems with modern consumer preferences for financial management is a significant factor contributing to increased customer satisfaction. However, their study did not investigate the long-term effects of prepaid billing systems on customer loyalty, which remains a key area for further research.

In the US, Johnson and Lee (2022) examined prepaid billing systems in the utility sector, including electricity and water services. They found that prepaid meters enhance customer satisfaction by eliminating monthly bills and allowing customers to manage their usage proactively. The real-time data provided by these systems helps customers avoid late payments and engage more actively with their service usage. Johnson and Lee’s research underscores how prepaid systems can reduce payment issues and improve overall customer experiences in the utility sector. However, their study lacks a comparison of customer satisfaction between prepaid and traditional postpaid billing systems, leaving a gap in understanding the relative benefits.

Patel and Kumar (2023) investigated the use of prepaid billing systems in India’s energy sector, focusing on customer satisfaction. Their findings indicated that prepaid meters contribute to higher satisfaction levels by offering a transparent billing process and reducing billing disputes. Customers appreciate the ability to pay in advance and avoid unexpected charges, which enhances their overall satisfaction with the service. Patel and Kumar highlight that the flexibility and transparency of prepaid systems are key drivers of customer contentment in the Indian energy sector. Despite their valuable findings, the study did not explore the impact of socioeconomic factors, such as income level or education, on the effectiveness of prepaid billing systems, which could provide deeper insights into customer preferences.

In China, Liu and Wang (2023) studied the impact of prepaid billing systems on customer satisfaction in the telecommunications sector. Their research showed that prepaid systems significantly improve customer satisfaction by providing users with better control over their expenditures and reducing billing errors. Liu and Wang found that customers value the predictability and accuracy of prepaid billing, which contributes to a more satisfactory service experience. The study highlights how prepaid systems address common billing issues and align with customer preferences for financial management. However, the research did not consider the challenges faced by older or less tech-savvy customers in adapting to these systems, which remains an underexplored aspect in the literature.

In East Africa, Garcia and Thomas (2021) explored the implementation of prepaid billing systems in Kenya’s water sector. Their research found that prepaid systems enhance customer satisfaction by offering transparency and control over water usage and costs. Customers valued the ability to monitor their consumption and manage their budgets effectively. Garcia and Thomas argue that the increased visibility and predictability provided by prepaid systems lead to higher satisfaction levels among customers in the East African context. However, their study does not address the impact of these systems on rural customers or those in informal settlements, who might face unique barriers to accessing or using prepaid services.

Similarly, Karanja and Njeri (2022) examined prepaid billing systems in Uganda’s telecommunications sector and found that these systems positively affect customer satisfaction. The simplicity and predictability of prepaid billing contribute to a more favorable customer experience. Customers reported higher satisfaction due to the avoidance of overage charges and greater control over their spending. Karanja and Njeri’s study underscores the importance of prepaid systems in enhancing satisfaction by providing clear and manageable billing options. However, their research does not delve into customer concerns about privacy and data security, which could affect the adoption and long-term satisfaction with these systems.

In South Africa, Mokoena and van der Merwe (2023) investigated the impact of prepaid billing on customer satisfaction in the energy sector. Their study revealed that prepaid billing systems improve satisfaction by delivering clear and predictable billing information. Customers appreciated the ease of use and transparency associated with prepaid systems, which helped to alleviate common billing frustrations. Mokoena and van der Merwe highlight that prepaid systems offer significant benefits in terms of customer satisfaction and service reliability. However, the study overlooks the potential for technological issues, such as network disruptions, which may undermine the effectiveness of prepaid systems and customer satisfaction.

In Nigeria, Adebayo and Olaniyi (2023) explored the effects of prepaid billing on customer satisfaction within the electricity sector. Their research indicated that prepaid billing systems lead to enhanced satisfaction by reducing billing disputes and providing more accurate billing information. Customers found that the ability to manage their energy consumption effectively and avoid unexpected charges contributed to a more positive service experience. Adebayo and Olaniyi’s study emphasizes the role of prepaid systems in improving satisfaction through accurate and transparent billing. However, the study does not address the financial literacy levels of customers, which may influence their ability to manage their prepaid billing effectively.

In Tanzania, Kerosi and McCord (2022) examined customer satisfaction with prepaid billing systems in the telecommunications sector. Their research showed that prepaid billing systems were associated with increased customer satisfaction due to their transparency and ease of management. Kerosi and McCord found that customers appreciated the ability to top-up their accounts in advance and avoid unexpected charges, which led to greater overall satisfaction. However, their research does not explore the potential impact of prepaid systems on customer retention and loyalty, which remains an important area for future studies.

More so, Kamau and Wanjiru (2023) assessed the adoption of prepaid billing systems in Kenya’s water sector and its impact on customer satisfaction. Their findings revealed that prepaid billing enhances satisfaction by providing better visibility into water usage and costs. Customers valued the flexibility and control offered by prepaid systems, which resulted in a more favorable service experience. Kamau and Wanjiru argue that the predictability and transparency of prepaid billing systems are key factors in increasing customer satisfaction in the East African region. However, they did not explore how local infrastructure challenges, such as unreliable electricity or internet connectivity, might impact the efficiency and customer satisfaction associated with prepaid billing systems.

Methodology

Results

The first objective of the study was to determin the effect of the prepaid billing system on customer satisfaction in the National Water and Sewerage Corporation (NWSC) in Bushenyi-Ishaka Municipality. A total of 6 items scored on a 5-point Likert scale ranging from (1) for strongly disagree, (2) for disagree, (3) for not sure, (4) for agree, and (5) for strongly agree were used to collect data from NWSC customers. The responses focused on how the prepaid billing system influences aspects such as accuracy, transparency, convenience, service reliability, and overall satisfaction. The results are presented in Table 1 below.

The interpretation of the results in Table 1 regarding the effect of the prepaid billing system on customer satisfaction in NWSC in Bushenyi-Ishaka Municipality provides insights into the perceptions and experiences of customers regarding water service delivery. The findings shown in Table 1 reveal several aspects of how the prepaid system has influenced customer satisfaction. A significant number of respondents 105 (40.1%) strongly agreed, and 125 (47.7%) agreed that the prepaid system allows customers to use water only when they have credited their water accounts. Only 24 (9.2%) were undecided, while a small portion 5 (1.9%) disagreed and 3 (1.1%) strongly disagreed. The high mean of 4.24 and a standard deviation of 0.786 indicates that customers are generally aware and satisfied with the system’s usage-based approach to service delivery, which promotes accountability and resource conservation.

On whether the prepaid system has enabled customers to self-manage their water accounts, responses were more varied. Only 72 (27.5%) strongly agreed and 37 (14.1%) agreed, while 34 (13.0%) remained undecided. A notable number of respondents 27 (10.3%) disagreed and a significant proportion 92 (35.1%) strongly disagreed. The mean score was 2.89 with a standard deviation of 1.657, suggesting mixed experiences and possible gaps in user knowledge or technological challenges in managing accounts independently. Regarding the empowerment to control water costs through prepaid billing, 111 (42.4%) of respondents strongly agreed and 51 (19.5%) agreed. Meanwhile, 29 (11.1%) were undecided, 35 (13.4%) disagreed, and 36 (13.7%) strongly disagreed. This response produced a mean of 3.63 with a standard deviation of 1.476, showing that a considerable number of customers appreciate the cost control benefits of the prepaid system, although some still face challenges with budgeting and usage prediction.

The statement that prepaid water meters have reduced many customer complaints due to self-managed accounts was supported by 105 (40.1%) respondents who strongly agreed and 113 (43.1%) who agreed. Only 16 (6.1%) were undecided, while 8 (3.1%) disagreed and 20 (7.6%) strongly disagreed. With a mean of 4.05 and standard deviation of 1.128, the data suggests a broad consensus that prepaid meters contribute to a reduction in billing disputes and service-related complaints.

On the issue of independence and flexibility in water usage, 123 (46.9%) of respondents strongly agreed and 115 (43.9%) agreed that prepaid billing allows divisibility in purchasing water. Few respondents 11 (4.2%) were undecided, while 4 (1.5%) disagreed and 9 (3.4%) strongly disagreed. This yielded a high mean of 4.29 and standard deviation of 0.894, showing that the majority of customers value the autonomy and convenience provided by the prepaid system. Regarding operational efficiency, 64 (24.4%) strongly agreed and 185 (70.6%) agreed that the prepaid billing system reduces operational costs as meter readers no longer need to visit homes for readings. Only 9 (3.4%) were undecided, while 1 (0.4%) disagreed and 3 (1.1%) strongly disagreed. The mean score of 4.17 and a low standard deviation of 0.608 reflect strong agreement and uniformity in customer perceptions about improved efficiency and reduced overhead costs for NWSC.

The overall mean of 3.95 indicates that, on average, respondents agree that the prepaid water billing system improves customer control, reduces complaints, and provides independence in water usage. The relatively low SD (0.92) shows moderate consistency in respondents’ opinions. These findings imply that the prepaid billing system has a generally positive impact on customer satisfaction in areas such as usage transparency, autonomy, and cost control. However, challenges remain regarding customer capacity to self-manage accounts, pointing to a need for more training and sensitization. Addressing these gaps will likely enhance the effectiveness and acceptance of the prepaid system, contributing to improved service delivery and greater customer satisfaction within Bushenyi-Ishaka Municipality.

The model summary in Table 2, indicates that customer satisfaction explains a statistically significant but modest portion of the variation in the prepaid. The R Square value of .153 means that approximately 15.3% of the variability in prepaid is accounted for by its linear relationship with customer satisfaction. The Adjusted R Square value of .150, which is very close to the unadjusted value, confirms that this result is not due to an over specified model, while the Standard Error of the Estimate of .40662 represents the average distance that the observed data points fall from the regression line.

The ANOVA Table 3, tests the overall significance of the regression model. The key finding is the highly significant F-statistic (F = 46.990, p < .05). This very low significance value (Sig. = .000) allows us to reject the null hypothesis that the model is no better at predicting the outcome than using the mean of the dependent variable. In essence, this confirms that the regression model, which uses customer satisfaction to predict prepaid, is statistically significant.

The coefficients Table 4 provides the specific equation for the predictive model and tests the significance of each predictor. The constant (1.412) is the predicted value of prepaid when customer satisfaction is zero. The unstandardized coefficient (B) for customer satisfaction is .592, which means that for every one-unit increase in customer satisfaction, the prepaid variable is predicted to increase by .592 units. This relationship is statistically significant (t = 6.855, p < .05). The standardized coefficient (Beta) of .391 indicates a moderate positive effect of customer satisfaction on the prepaid variable.

Discussion and implications

Based on the empirical findings and the theoretical lens of the Theory of Planned Behavior (TPB), the results of the regression analysis become highly interpretable. The significant positive relationship between customer satisfaction and prepaid billing (B = .592, p < .05) strongly aligns with global and regional studies. This finding corroborates the work of Sharma & Gupta (2023), Johnson & Lee (2022), and Mwaura & Otieno (2023), who all found that the core features of prepaid systems transparency, predictability, and control are primary drivers of customer contentment. From a TPB perspective, this coefficient represents the “behavioral belief”; customers hold a positive attitude toward prepaid systems because they believe it leads to the desirable outcome of financial control and avoids unexpected charges. The model explains 15.3% of the variance, suggesting that while perceived control is a significant factor, other elements of TPB namely normative beliefs (social influence) and control beliefs (perceived ease of use) also play crucial roles in forming overall satisfaction, as indicated by their emphasis in the theoretical and empirical literature.

The discussion, however, must be tempered by the contextual limitations highlighted in the empirical review. The model’s explanatory power (R² = .153) implies that a substantial portion (84.7%) of what influences prepaid billing satisfaction is unexplained by this single variable. This directly echoes the gaps identified in the literature, such as socioeconomic factors (Patel & Kumar, 2023), technological barriers for less tech-savvy users (Liu & Wang, 2023), infrastructure challenges like network reliability (Mokoena & van der Merwe, 2023; Kamau & Wanjiru, 2023), and concerns over data privacy (Karanja & Njeri, 2022). Furthermore, the TPB framework reminds us that intention, a precursor to satisfaction, is also shaped by social norms and perceived behavioral control. Thus, the findings suggest that for NWSC in Uganda to fully realize the potential of prepaid systems, strategies must extend beyond the system’s inherent transparency to address these external normative and control factors, such as community education programs, robust technical support, and reliable infrastructure, to convert intention into sustained satisfaction and loyalty.

Conclusion

Based on the empirical findings and theoretical framework, it is concluded that the implementation of prepaid billing systems at NWSC Uganda significantly enhances customer satisfaction, primarily by empowering users with greater control, transparency, and predictability over their water consumption and expenditures, which aligns with the core behavioral beliefs outlined in the Theory of Planned Behavior; however, to fully maximize satisfaction and adoption, future strategies must also address the normative and control beliefs identified in the literature, such as improving digital literacy, ensuring robust technical infrastructure, and building trust through addressing data privacy concerns.

Ethical approval and consent to participate

The study protocol was reviewed and approved. This research was conducted in accordance with ethical guidelines and received approval from the Kampala International University Ethics Committee (Approval Number: KIU-2025-816). Informed consent was obtained from all participants, and confidentiality was maintained throughout the study.

Informed consent statement

All participants provided written informed consent after receiving a complete description of the study. This description covered the research aims, what their involvement would entail, any potential risks, and the benefits of the research. We assured them that their participation was voluntary, their information would be kept confidential, and they could withdraw from the study at any time without any negative repercussions.

Consent to publish declaration

We, the authors, agree to publish this work in F1000 Research and confirm that it is original, unpublished, and not submitted elsewhere. Any personal data included has been approved by those involved, with consent records available if needed.