Pre-Paid vs Post-Paid. WHY?

Why are there in existence Pre-Paid and Post-Paid cell providers/plans out there???

I am having trouble finding the logic or sense in this these days.

My folks have Post Paid VZW plan. But they pay the same amount each month, for “Unlimited Everything”. Even the capped plans, are the same cost each month.

Many years ago, in the days of flip and feature phones, most plans were usage based, with overage charges on everything, or different costs for day vs night/weekend minutes use.

Modern times, most plans stay the same per month and overages charges are a rare thing if they even exist only on certain plans.

With either type of plan, u can still have monthly device payment in most cases.

I fail to see any difference in why pre and post exist.
Either company is often getting the same $ amount from the customer.
So, when person A is paying for a 10GB pre-paid plan, and person B is paying for a 10GB Post paid plan, both have unlimited talk/text, both cost the same per month(or very close, in my past compares, seen as little a difference of $5 to $10).
Its the same service and same plan and both people can use it in the same way.
Users don’t change their normal usage habits based on their account being pre or post paid. They may do so based on the plan features, data bucket, min/text limits etc.

What difference does it make if a customer is paying each month for the same usage plan, for the month in advance, or month past?? Wouldn’t the company prefer being paid in advance, vs, the customer using service for the month, and deciding not to pay for it.
Company has the money in hand first with pre-pay, its guaranteed paid for usage by customer and in customers mind, they have paid for what they need. (Like when u by something at a store, u have to pay for it before u can take it home and use it. U can’t just take it off the shelf, and send payment to the store 30 days later.)

The only things i know of that is a real differences on the 2 types, is Post most often requires more invasive sign up process of identity verification, like SSI, and a credit check.
Post also has higher network priority during times of congestion.
So, the companies thus often charge u more $ for these?

MVNO’s are almost always prepaid. They do “rent” usage of one of the major carriers network. But I see no reason why they can’t be post-paid either. (Google Fi is kinda a hybrid model, as u prepay base service, then your data usage is post paid based on usage.)

Any good and legitimate reasons or laws that could be quoted/linked to that would explain why these 2 things exist…other than just to confuse, annoy, and complicate things.

I’d think customer credit check/ratings help in making their business plans that allow them to offer “fake” discounts and/or easy payments for phones, replacements or upgrades and the ability to lock in customers into contracts for extended periods. Some less worthy customers can be rejected and the accepted customers are forced to pay or have their credit rating dinged. The main carriers offer prepaid so they won’t be accused of denying basic services to those less credit worthy without require a hefty deposit.


Don’t you watch TV crime dramas? The main reason for pre-paid accounts is so that criminals can have anonymous “burner” phones to commit their dastardly deeds.
There are all sorts of pre-paid services. If the provider gets your money upfront, they don’t have to check your credit rating, they don’t have to bill you, they don’t need a mailing address, …
You can easily convert a post-paid service to a pre-paid using a credit card.

Not exactly, u still have to provide valid info in order to sign up for such services.
U can however, walk into some random gas stations in some areas and pay cash for a pre-paid phone that already has minutes on it, with no further sign up required.

I am not talking about those “burner” type use cases.
If that was the only real use case, then big name major carriers would not offer pre paid in addition to post.

Aside from how the money is handled, i still feel to see a real difference or reason for both to exist in the same company.

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