Payasyougo

Pay-as-you-go, or pay-as-you-go pricing, is a model in which customers are charged only for the goods or services they actually use, rather than paying a fixed upfront fee or committing to a long-term subscription. Billing is typically based on measured usage or consumption, with charges calculated per unit of use, such as per minute, per megabyte, or per transaction. The model contrasts with prepaid arrangements, where funds are loaded in advance, and postpaid arrangements, where usage is billed after the fact at a monthly rate.

Pay-as-you-go is widely used in telecommunications for voice and data services, utilities like electricity or water when metered, and cloud computing or software services that bill by usage. It is also used in mobility and transportation for per-ride charges or pay-per-trip models, and in digital services where access is granted dynamically based on consumption.

Advantages include flexible access, lower upfront cost, and scalable usage that matches demand. It can encourage efficient use and prevent unused capacity. Disadvantages include the potential for fluctuating monthly costs, the need for ongoing monitoring to avoid unexpected charges, and sometimes higher unit prices compared with bulk purchases or subscriptions.

To manage risk, users may set usage caps, budgets, or alerts, and providers may offer mixed pricing options with base fees or tiered pricing.

Historically, metered billing for utilities laid the groundwork for the pay-as-you-go model, with technological advances enabling more granular measurement in other sectors. Today the term is used across industries to describe usage-based charging.