It does take a bit of getting your head around, because you're probably looking for complexity which is not there.

Prepayment is just what it says.

You pay money (or money's worth) now, and take delivery of goods or services later, receiving a certificate of entitlement (on your mobile phone) in the meantime. The certificate does not entitle you to demand delivery (as a futures contract would) but if you do take delivery from the issuer (or from another affiliated within a clearing union), he undertakes to accept the certificate in payment.

You will probably only accept such a certificate if a discount or profit is agreed which compensates you for the delay. You achieve your discount/profit when you return it to the issuer. It is the return of prepay credit instruments to the issuer which gave rise to the the phrases 'tax return' and 'rate of return'.

At the moment prepay is already normal in relation to consumables, but not recognised a the investment it also is.

Mobile phone prepay is everywhere typically for those who cannot afford or do not want an account. Meanwhile poor people are not only obliged to prepay for electricity because they can't get credit: to add insult to injury pay more for the privilege. Similarly prepaid debit cards for the un-banked.

More to the point, the fiat currency which we currently use represents in reality - whether it is created and issued by private banks or the central bank as fiscal agents of the Treasury - prepayment of taxes.

Reality-based Economics and the Last Big Thing

There's nothing whatever new about prepayment. It's how the financial system worked formally or informally for hundreds, if not thousands of years, and still does in many parts of the world.

My case is that we began a 300 year aberration from the original undated 'stock' (prepay) into the conventional equity (shares of 'common' or 'joint' stock) and debt (interest bearing 'loan' stock such as 'gilt-edged' stock) forms of finance capital.

That era ended five years ago because it resulted in unsustainable concentration of wealth on a cosmic scale. We are now transitioning to a knowledge-based, energy-denominated economy of abundance from an economy of scarcity, and I think the endgame is probably that we will eventually cease to keep score at all.

Finally, it's not 'my scheme'. I'm simply describing, updating and re-introducing in electronic form the way things used to be done but which has been forgotten for centuries.


"The future is already here -- it's just not very evenly distributed" William Gibson