In India, presently distribution companies are collecting revenues from their consumers by metering and billing. The expenses for metering, billing, and collecting dues became complex as electricity is supplied to large number of consumers located in far-flung areas, resulted in high cost per unit. This may encourage consumers to fudge meter readings. To address these problems, distribution companies can opt prepaid smart card energy meter, which overcomes the whole problems associated with the present billing system and will make the consumer more conscious about usage electricity. This paper explores the design and assemble of smart card prepaid electricity meter system, which enables the consumer to buy required amount of energy and also provides information about their credit balance. A prototype of the system has been developed with the state-of-the-art digital and information technology and proven to be stable, reliable, tamper resistant, low cost, and easy maintenance. Electricity is a major source of energy in the world and used in every civilized country for domestic, commercial and industrial purpose. Recently owing to raise in number of new housing, commercial and industrial developments in India, the number of consumers of electricity have been increased in the network distribution. The monthly power bill for consumers is calculated from post-paid meter reading based on the electricity consumption. But the disadvantage of this system is that meter readers are needed to visit every door to door to read the meter for billing purposes. This is a tiresome, lengthy and error prone process. Moreover, there is a chance for consumers as well as meter readers to do the corruption. In post-paid system (1), the monthly bill sent to the consumer by mail in the beginning of the month and all the consumers often need to gather in a long queue to pay the bills. This procedure is tiresome and time consuming. In this paper, a prepaid metering (PPM) system (2) has been proposed. Each consumer has to install digitally designed prepaid electricity meter along with smart card in their home, office or industry. Based on the electricity utilization the credit will be deducted automatically from the smart card. When the credit goes below the threshold value, the meter gives warning icons and if credit reaches to zero the meter will automatically cut off the power supply. The consumer has to go to the vending station with the smart card and money to buy electricity. In the vending station, user can buy the credit to his smart card by paying the money. Then the consumer will insert the smart card to the meter and the meter will be recharged. In prepaid billing system, the consumer will be always conscious about the remaining credit and thus try to use electricity carefully and stop its misuse. Furthermore, in contrast with post-paid billing, the consumer can buy credit at any time in the month from the vending station.