With prepaid terms you pay before sending traffic and the carrier deducts usage from your balance. With postpaid terms the carrier invoices you after each billing cycle, up to an agreed credit limit. New relationships almost always start prepaid; postpaid comes with trading history, references or a guarantee.
How prepaid works
You transfer funds, the carrier credits your account, and every call or message is charged against that balance in near real time. When the balance reaches zero, or a low balance threshold, traffic is blocked until you top up.
- For the buyer: easy to start, no credit checks, full control of spend. The risk is an interruption if you forget to top up, so set alerts and keep a buffer of a few days of traffic.
- For the seller: no credit risk, which is why most carriers insist on it with new partners.
Ask how fast payments are credited (bank transfers can take one to three working days across borders), what methods are accepted, and whether unused balance is refundable.
How postpaid works
The carrier gives you a credit limit and invoices you at the end of each billing cycle. You pay within the agreed term. Common cycles in wholesale are weekly, bi-weekly or monthly, with payment due a few days to a few weeks after the invoice. Short cycles are typical when volume is high relative to the credit limit.
If usage reaches the credit limit before the invoice is paid, the carrier can block traffic or ask for an early payment. Agree in writing what happens in that case, so that your traffic is not stopped without warning.
Comparison
| Prepaid | Postpaid | |
|---|---|---|
| When you pay | Before traffic | After each billing cycle |
| Credit check | None | Usually required |
| Risk of blocked traffic | When balance runs out | When credit limit is reached or payment is late |
| Cash flow | Money tied up in advance | Pay after you bill your own customers |
| Disputes | Refund or credit after review | Disputed amount can be held back per agreement |
Netting for two-way partners
When two carriers both buy and sell to each other, they often agree to net the invoices: at the end of the cycle each side's charges are compared and only the difference is paid. This reduces bank transfers and lowers credit exposure. Netting needs aligned billing cycles, the same currency and a clear rule for disputed amounts. It is usually written into the interconnect agreement (see the interconnect agreement checklist).
Moving from prepaid to postpaid
Carriers decide on credit from evidence of risk. What typically helps:
- A few months of clean prepaid history with steady volume.
- Complete company onboarding documents (see KYC and onboarding).
- Trade references from other carriers.
- A deposit, bank guarantee or credit insurance cover for the requested limit.
Start by asking for a modest limit, close to one cycle of traffic, and grow it as volume grows.
Practical tips
- Match the billing cycle to how you are paid by your own customers, so you are not financing their credit.
- Check that the invoice period and time zone match your own billing, or CDR reconciliation becomes harder.
- Read the billing increment and the rate change notice period in the same agreement: they affect the invoice as much as the payment term.
- Fraud exposure is higher on postpaid; protect your switch against toll fraud, because you will owe the minutes.
When you request a VoIP termination route or an A2P SMS route through VoIPMatcher, tell us the payment terms you prefer in the request. We take it into account when we source the route from our carriers, and we manage the route for you. Request a voice route or request an SMS route.
Frequently asked questions
What payment terms do wholesale carriers offer?
The two models are prepaid, where you pay before sending traffic, and postpaid, where you are invoiced after each billing cycle up to a credit limit. Postpaid cycles are commonly weekly, bi-weekly or monthly, with payment due days to weeks after the invoice. Two-way partners often net their mutual invoices and pay only the difference.
What happens when my prepaid balance runs out?
Traffic is blocked when the balance reaches zero or a low balance threshold set by the carrier, and it resumes once your top-up is credited. Bank transfers across borders can take one to three working days, so set balance alerts and keep a buffer of a few days of traffic to avoid interruptions.
What is a credit limit in telecom?
A credit limit is the maximum amount of unpaid traffic a carrier lets you run on postpaid terms. When usage reaches it before the invoice is paid, the carrier can block traffic or ask for an early payment. The limit is usually set from your history, references and any deposit or guarantee.
Is postpaid riskier for the seller?
Yes. On postpaid terms the seller delivers traffic before being paid, so it carries the risk of late payment, default and losses from fraud on the buyer's side. That is why sellers ask for credit checks, references, deposits or guarantees, set limits close to one cycle of traffic and keep the right to suspend on late payment.
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