Usage-Based Billing

Billing based on actual consumption rather than flat subscription fees.

Finance & Billing

Ufafanuzi wa

Usage-based billing (also called consumption billing or metered billing) charges customers based on what they actually use β€” API calls, data processed, seats active, events fired β€” rather than a flat subscription. UBB has grown popular in cloud infrastructure and AI products where usage varies wildly per customer.

Pointi muhimu

  • Measurement: raw usage events (calls, GB, seats)
  • Pricing: per-unit rate, tiered volume discounts, committed usage discounts
  • Billing cadence: typically monthly in arrears with overage billing
  • Requires accurate metering β€” a missing or duplicated meter is revenue lost
Mfano wa Mfano

An API product charges $0.001 per call. A customer makes 5 million calls in a month. Their bill is $5,000, issued after month-end.

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