A Prepaid World

In India, you prepay for almost everything. Here are a few examples of things that are typically prepaid in India:

• Mobile Communications - Nearly 80% of mobile subscribers are prepaid. This is in contrast to the U.S. where about only 30% of the market is prepaid. To recharge a mobile phone, the customer can either purchase a recharge coupon or have the recharge completed by SMS.
• Cable Service - Service can be paid for in advance. To extend service, simply purchase recharge coupons.
• Taxis and Rickshaws - Travelers can prepay for transportation from the airport. This is largely in an effort to prevent foreigners from getting ripped off, and it helps.
• Nightclubs - Pay a cover charge at the door and in exchange, receive a set of coupons to use when purchasing drinks inside.

There's probably nothing too shocking about the list above, but what has surprised me is that many, and likely the majority, of Indians also prepay for large purchases like cars and houses! Financing is not commonly used and its often frowned upon, so many people only buy vehicles or property when they have enough money to pay for them outright. I can't quite grasp this concept and the thought of making a down payment on a house is scary enough, I can't imagine paying for it outright.