Pay-as-you-go (PAYG) is a billing model where customers pay only for what they actually consume, with no upfront commitment. There is no fixed monthly fee to start — the bill is built entirely from metered usage during the period.
How pay-as-you-go works
The product meters a unit of consumption — API calls, tokens, compute minutes, messages — and charges a rate per unit. At the end of the period, the total is the number of units consumed multiplied by the rate.
A customer who runs 10,000 units pays for 10,000. A customer who runs zero pays zero. There is no plan fee sitting underneath, which is what separates pure PAYG from a subscription with usage on top.
Most PAYG products either bill in arrears against a saved payment method or draw down a prepaid balance the customer tops up in advance.
Difference from subscriptions and metered billing
A subscription charges the same price every period whether the customer uses the product or not. It gives you predictable revenue but can feel unfair to light users.
Metered billing usually pairs a base fee with an included quota and charges overages beyond it. Pay-as-you-go strips out the base fee entirely — every unit is billed from the first one, so the model is purely consumption-driven.
Real-world examples
Cloud infrastructure popularized PAYG: you pay per GB stored, per hour of compute, per request served. AI APIs charge per token with no minimum. Communication platforms charge per message or per minute. In each case the customer can start with a single call and scale to millions without ever signing up for a tier.
The appeal is a zero-friction start: the customer commits to nothing and pays in exact proportion to the value they pull from the product.
When to use pay-as-you-go
Pay-as-you-go fits products where usage is spiky, hard to predict, or where a low barrier to entry drives adoption. Developers testing an API, teams with seasonal load, and new customers who want to try before committing all prefer PAYG.
It is less suitable when you need predictable recurring revenue, or when the cost of serving a customer is mostly fixed rather than usage-driven. In those cases a subscription or a hybrid plan with a base fee protects your margin better.
How Commet handles pay-as-you-go
Commet supports pay-as-you-go through its metered and balance consumption models. You can run a plan with no base price and a per-unit rate, so customers are billed purely on consumption, or have them draw down a prepaid balance.
Usage events are ingested through the SDK in real time, and Commet handles deduplication, period attribution, and invoicing automatically.
See the consumption models docs to choose the right one, or start with the usage tracking guide.