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Usage-based pricing

Choose your pricing model

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Linear pricing

Charge a single, linear rate for usage.

Example

  • $0.1 per unit
  • 550 units = $55.00
Linear pricing
Examples: OpenAI - GPT-3 Davinci

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Linear pricing (Percentage-based)

Charge a single, linear percentage-based fee for usage. You can optionally set a minimum and a maximum fee threshold. For example, charge 0.5% of every payment event with a $1 minimum and a $10 cap per payment.

Example

  • 0.5% per payment
Calculation for 50 payments amounting to $1,000 = $1,000 * 0.5% = $5.00
Linear percentage pricing
Examples: Stripe - Invoicing

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Linear pricing with fee thresholds

Use minimum and maximum fee threshold to charge a predictable amount for transactions.

Example

  • 2.00% per payment, $1.00 minimum unit fee, $10.00 maximum unit fee

Calculation for 3 payments of $25, $100 and $500:
  • 2.00% of $25.00 = $0.50 -> $1.00 minimum fee applies
  • 2.00% of $100.00 = $2.00 -> Within min and max fee threshold
2.00% of $750.00 = $15.00 -> $10.00 cap applies
Total: $1.00 + $2.00 + $10.00 = $13.00
Linear percentage pricing
Examples: Stripe - Invoicing

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Volume pricing

Offer volume discounts for higher usage and an optional flat fee per usage tier. Customers only pay the unit and flat fee in their current tier.

Example

  • Tier 1: 0 - 100 units @ 1$/unit + $20 flat fee
  • Tier 2: 100 - ∞ units @ $0.75/unit + $50 flat fee
Calculation for 125 units: 125 * $0.75 + $50 = $143.75
Volume pricing
Examples: Twilio - SMS

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Volume pricing (Percentage-based)

Similar to standard volume tiers, but the unit price is a percentage of a sum (e.g., total transactions). Customers only pay the percentage and flat fee in their current tier. Optionally configure a unit cap that applies to each percentage charge (e.g. 0.2% of transaction volume, capped at $5 per transaction). For percentage-based volume pricing, you can optionally set a minimum and a maximum fee threshold. For example, charge 0.5% of every payment event with a $1 minimum and a $10 cap per payment.

Example

  • Tier 1: 0 - $10,000 @ 0.1% + $500 flat fee
  • Tier 2: $10,000 - ∞ @ 0.05% + $250 flat fee
Calculation for $15,000 Transaction volume: $15,000 * 0.05% + $250 = $325
Volume percentage pricing
Examples: Stripe - Payments

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Graduated pricing

Charge multiple rates for multiple tiers (similar to progressive income tax), with an optional flat fee per tier. Tiers and flat fees accumulate.

Example

  • Tier 1: 0 - 500 units @ $0.5/unit + $500 flat fee
  • Tier 2: 501 - ∞ units @ $0.7/unit + $750 flat fee
Calculation for 125 units: 100 * $1 + $20 + 25 * $0.75 + $50 = $188.75
Graduated pricing
Examples: Amazon Web Services - S3

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Graduated pricing (Percentage-based)

Similar to standard graduated tiers, but the unit price is a percentage of a sum (e.g., total transactions). Tiers and flat fees accumulate.

Example

  • Tier 1: 0 - $10000 @ 0.1% + $500 flat fee
  • Tier 2: $10000 - ∞ @ 0.05% + $250 flat fee
Calculation for $15000 Transaction volume: $10000 * 0.1% + $500 + $5000 * 0.05% + $250 = $875
Graduated percentage pricing

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Packaged pricing

Charge a fixed price for a package of units (similar to linear rate but with packaged quantities). Also known as stair-step pricing.

Example

Pricing: $10 per 250 unitsCalculation for 600 units: 3 Packages * $10 = $30
Packaged pricing

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Credit burndowns

Offer credit grants that customers can burn down each month. Unused credits are rolled over to subsequent billing periods. If all credits are burned down in a period, overages apply.

Example

Credits: $250 for 1500 API credits (no expiry) Overages: $0.10 per creditCalculation for 1600 units: 100 * $0.10 = $10
To implement this pricing model, grant credits to customers via API or dashboard. In addition to usage-credits (tied to a usage metric), you can also offer cash credits. Learn more about credit grants.