Model usage-based pricing
Learn about the different pricing models for usage-based billing on Stripe.
Common pricing models include fixed fee and overage, pay as you go, or credit burndown. Use the guidance below to set up these pricing models in Stripe.
Fixed fee and overage model 
Use the fixed fee and overage model to charge a flat fee per month for your service at the beginning of the period. The flat fee has some included usage entitlement, and any additional usage (overage) charges at the end of the period.
You can use the Stripe Dashboard or API to set this up with two prices within the same product.
For example, Alpaca AI introduces an advanced model called Llama AI. Priced at 200 USD per month, this model includes 100,000 tokens. We charge any usage above the included tokens at an additional rate of 0.001 USD per token.
Pay as you go 
The pay as you go model (also called in arrears billing) lets you track usage incurred over a determined period, then charge the customer at the end of the period.
Rate cards private preview
You can use rate cards to set up the pay as you go model. Rate cards are currently in private preview. Reach out here to request access.
You can deploy any of the following pricing strategies:
- Per unit: Charge the same amount for each unit.
- Per package: Charge an amount for a package or bundle of units or usage.
- Tiered and volume-based pricing: With volume pricing, you charge the subscription item at the tier that corresponds to the usage amount at the end of the period.
- Tiered and graduated pricing: Similar to volume pricing, graduated pricing charges for the usage in each tier instead of applying a single price to all usage.
This model might cause customers to accumulate significant usage, and affect their payment method status at the end of the month.
Credit burndown 
The credit burndown model lets you collect prepayment for usage-based products and services. Customers can use billing credits to pay an initial amount, and then apply their billing credits as they use the product.
Rate cards private preview
You can use rate cards to set up the pay as you go model. Rate cards are currently in private preview. Reach out here to request access.
For example, Alpaca AI wants to sell a large enterprise contract to an existing self-serve customer for their new Llama AI Model. The customer commits to pay 100,000 USD up front for Llama AI, so they can get 120,000 USD of billing credit usage to use within 1 year.
Free trials 
You can use trial periods for subscriptions with usage-based billing. During the trial period, any usage accrued doesn’t count toward the total charged to the customer at the end of the billing cycle. After the trial period ends, the usage accrues and bills at the end of the next billing cycle.
Make sure your integration properly monitors and handles webhook events related to trial status changes.
A few days before a trial ends and the subscription moves from trialing
to active
, you receive a customer.
event. When you receive this event, make sure you have a payment method on the customer account to bill them. Optionally, provide advance notification to the customer about the upcoming charge.
Status | Description |
---|---|
trialing | The subscription is currently in a trial period and you can safely provision your product for your customer. The subscription transitions automatically to active when a customer makes the first payment. |
active | The subscription is in good standing. For past_ subscriptions, paying the latest associated invoice or marking it uncollectible transitions the subscription to active . Note that active doesn’t indicate that all outstanding invoices associated with the subscription have been paid. You can leave other outstanding invoices open for payment, mark them as uncollectible, or void them as you see fit. |
incomplete | The customer must make a successful payment within 23 hours to activate the subscription. Or the payment requires action, such as customer authentication. Subscriptions can also be incomplete if there’s a pending payment and the PaymentIntent status is processing . |
incomplete_ | The initial payment on the subscription failed and the customer didn’t make a successful payment within 23 hours of subscription creation. These subscriptions don’t bill customers. This status exists so you can track customers that failed to activate their subscriptions. |
past_ | Payment on the latest finalized invoice either failed or wasn’t attempted. The subscription continues to create invoices. Your subscription settings determine the subscription’s next state. If the invoice is still unpaid after all attempted smart retries, you can configure the subscription to move to canceled , unpaid , or leave it as past_ . To move the subscription to active , pay the most recent invoice before its due date. |
canceled | The subscription was canceled. During cancellation, automatic collection for all unpaid invoices is disabled (auto_ ). This is a terminal state that can’t be updated. |
unpaid | The latest invoice hasn’t been paid but the subscription remains in place. The latest invoice remains open and invoices continue to generate, but payments aren’t attempted. Revoke access to your product when the subscription is unpaid because payments were already attempted and retried while past_ . To move the subscription to active , pay the most recent invoice before its due date. |
paused | The subscription has ended its trial period without a default payment method and the trial_settings.end_behavior.missing_payment_method is set to pause . Invoices are no longer created for the subscription. After attaching a default payment method to the customer, you can resume the subscription. |
Learn more about subscriptions and webhooks.