Usage-Based Billing Overview
Usage-based billing charges customers based on actual consumption of products or services. Instead of paying a flat recurring fee, customers pay for what they use — whether that is API calls, storage consumed, messages sent, tokens processed, or seats activated.
Why Usage-Based Billing?
- Fair pricing — Customers pay proportionally to the value they receive
- Lower barrier to entry — Small customers start with low costs and scale naturally
- Revenue alignment — Revenue grows with customer adoption and success
- Flexibility — Supports diverse business models across SaaS, infrastructure, communications, and AI/ML services
Architecture
BillHive’s usage-based billing pipeline consists of three stages:
Usage Events ──> Metered Features ──> Pricing & Invoicing
(raw data) (aggregation) (billing)Stage 1: Usage Event Ingestion
Raw consumption data enters BillHive as usage events. Each event represents a discrete action — an API call, a file upload, a message delivered. Events are schema-less, meaning they accept arbitrary properties as JSON without requiring predefined templates.
Ingestion methods:
- REST API (single event or batch)
- CSV bulk import
- Manual UI entry
Stage 2: Metered Features
Metered features define how raw events are aggregated into billable units. A metered feature specifies:
- Which event type to track
- Which property to aggregate (e.g.,
quantity,tokens,bytes) - The aggregation method (SUM, COUNT, MIN, MAX, AVG)
- Optional filter conditions to narrow the event stream
Example: A metered feature “API Calls” might COUNT all events of type api_request where endpoint != /health.
Stage 3: Pricing & Invoicing
Metered features are linked to plans and add-ons with:
- Included quantity — units bundled at no extra charge
- Overage rate — per-unit price for consumption beyond the included quantity
At billing cycle end, BillHive aggregates usage, subtracts included quantities, applies overage pricing, and generates invoice line items automatically.
Supported Billing Models
| Model | Description | Example |
|---|---|---|
| Fixed Fee + Overages | Base fee includes N units; excess charged per unit | $70/mo for 40 tasks, $1.50/extra task |
| Pay-As-You-Go | No base fee; billed purely on consumption | $0.03 per character translated |
| Hybrid | Combines recurring fees with usage components | $99/mo base + $0.01 per API call |
Prerequisites
Before setting up usage-based billing, ensure:
- Product families, plans, and add-ons are configured in the Rate Plan Builder
- Plans or add-ons intended for usage billing are marked with the Usage charge type
- Supported currencies and billing frequencies are configured