How usage-based billing works
Three steps turn activity into a charge. Metering records each billable event with a customer, a quantity and a time, and aggregation totals the events for the period: a sum, a peak or a count of unique items.
Rating then applies the price list to the total, and the result goes on the invoice at the end of the period. Some products reverse the order: the customer buys credits in advance, and usage draws them down.
Common pricing shapes
- Per unit: one price for every unit
- Graduated tiers: each band of usage has its own price
- Volume: the band reached sets the price for all units
- Allowance and overage: a plan includes a quantity, and extra units cost more
- Prepaid credits: paid up front and consumed over time
- Minimum commitment: a floor the customer pays whatever the usage
Why usage-based billing matters in payments
Payment companies price this way themselves: a fee per transaction plus a percentage of its value, billed monthly from the processing records.
The amount changes every period and is unknown in advance. Customers dispute what they cannot check, so accurate, deduplicated metering, a usage dashboard and spending alerts are part of the product.
Usage-based, flat-rate or per-seat billing?
- Flat-rate billing
- One price per period whatever the consumption. Simple to forecast, and the same for light and heavy users.
- Per-seat billing
- Priced by the number of users, not by what they do.
Where Usage-based billing shows up in a platform
Modules that do the work
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- Analytics & monitoringProduct analytics, attribution, engagement and crash reports, on a tracking plan you control.
- BackofficeOne console to run the platform: customers, money, risk, content and staff permissions.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.