The invention provides a key management system of a prepayment meter, which comprises a root key card management subsystem, a master key card management subsystem, and an application card management subsystem; the root key card management subsystem issues a root key card; after the master key card management subsystem adds area identity dissipation factors to the root key management card, the root key card educes the master key card for specially issuing work according to the area dissipation; the application card management subsystem imports the master key card in the application card. The key management system of the prepayment device has the advantages that: a three-level manner is adopted to issue and deliver the key to guarantee the confidentiality; the key management system of the prepayment meter keeps independent running from the management system of selling electricity, water, gas, and the like; the parent card and the application card have the same type; as the area factors are added to the keys, whether the application card in various areas is compatible or not, the system can be flexibly controlled.