Usage-based billing
Overview
Usage-based billing allows you to charge customers according to their actual consumption of a product or service.
The customer usually provides payment details when purchasing the subscription, but the final amount is calculated later based on usage recorded by your system. Your system calculates the billable usage and sends the result to Cleverbridge before the customer's next billing date. Cleverbridge then includes the usage-based amount in the next subscription billing event.
Usage-based billing components and requirements
The process involves the following components:
Before implementing usage-based billing, make sure that:
- The subscription is active.
- You know the subscription's next reminder date.
- Usage is calculated and submitted before the next reminder date.
- Usage has been applied to the subscription record before the billing event is created.
- Customers have consented to changes that may affect their subscription price.
How usage-based billing works
A typical usage-based billing process is:
- A customer purchases a subscription.
- The customer uses the product or service during the billing interval.
- Your system calculates the customer's usage.
- Your system updates the relevant subscription item through the Subscription API.
- Cleverbridge automatically bills the customer on the next billing date using the updated quantity and/or price.
For example, a customer may purchase a monthly data-storage subscription on March 17. On April 16, your system calculates the customer's storage usage and updates the subscription. On April 17, Cleverbridge bills the customer for the usage from the previous billing interval.
Usage-based billing options
Choose the option that matches your pricing model.
Bill usage at the regular subscription-item price
Use this option when the usage quantity determines the amount billed, and the subscription item already has the correct per-unit price.
For the implementation steps, request parameters, and examples, see Bill Customer for Usage.
Bill excess usage
Use this option when a subscription includes a base amount and an additional charge for usage above that base amount.
For example, a customer may pay a fixed monthly amount for up to 500 gigabytes and an additional amount for every gigabyte above that limit.
For the implementation steps and example, see Bill Customer for Excess Usage.
Bill usage using tiered or volume pricing
Use this option when the price per unit changes according to the total usage quantity.
For example, the first 1,000 messages may have one price per message, while higher usage tiers have lower or higher prices.
For the implementation steps and pricing example, see Bill Usage using Quantity-Based Pricing.
Bill usage at a negotiated or custom price
Use this option when an individual customer has a negotiated price that differs from the standard subscription-item price.
For the two-step implementation using the Update Subscription Item Price and Update Subscription Item endpoints, see Bill Usage at a Custom Price.
Important considerations
Customer consent
Get the customer's consent before making changes to a subscription. Coordinate price increases with Client Experience to help avoid chargebacks and customer inquiries.
In the European Economic Area, Strong Customer Authentication (SCA) may be required when the amount of a recurring electronic payment changes. This can affect the success rate of the renewal.
For more information, see Obtain customer consent.
Billing date
Usage must be applied to the subscription before the next reminder date. If the usage information is submitted after this date, it may not be included in the expected billing event.
Customer notifications
The Cleverbridge platform generates an email for new purchases. This email cannot be suppressed.
UpdateAction parameter
The UpdateAction parameter is used for documentation and tracking. Its value does not affect transaction processing. Use upgrade (or 1 in JSON) for upgrades, downgrade (or 2 in JSON) for downgrades, and update (or 0 in JSON) for other changes.
Other billing options
Depending on your implementation, you can also apply a discount coupon or suppress a transaction confirmation email. The confirmation email for a new purchase cannot be suppressed.