Abstract: A prepayment system for dispensing utilities using mag-stripe cards is disclosed wherein an accounting computer in a central office is used in conjunction with point-of-sale machines for encrypting a value message which is written onto the mag-stripe of a mag-stripe card. The value message contains information relating to the amount of utilities purchased by the customer, the utility rates, the site identification number, and a unique password formed by the site number, a hidden number, and the transaction number. The mag-stripe card is carried by mail or in person to the consumer's home or office and inserted into a mag-stripe card reader attached to microprocessor-based utility control device. This utility control device is capable of reading and decoding the mag-stripe card and storing the value information into memory for use in monitoring the utility usage of the customer and disconnecting or connecting the utility based on the amount of utilities purchased.