Skip to main content
knowledgecenter.avangate.com

Pay-per-use

Overview

Usage billing (or metered billing) enables you to charge customers a fixed recurring fee for their subscriptions starting with the initial purchase and subsequently as a part of the renewal process, plus overage costs for the metered resources they consume each billing cycle. The fixed subscription recurring fee can contain a specific quantity of resources, and Avangate adds per-unit overage costs, for the extra resources consumed. 

 

This feature supports scenarios in which total costs customers pay each billing cycle include into 2 components:

  • The subscription price. 
  • Usage fees charged in arrears. Avangate charges subscribers on a pay-per-use basis at the start of a new billing cycle for metered resources consumed during the previous billing cycle.

Availability

Contact Avangate directly if you wish to start taking advantage of usage billing.

Requirements

  • Use with products with Dynamic pricing (with base price) configurations. 
  • Activate and use only a single usage pricing options group per product. Avangate does not support:
    • Multiple usage pricing options groups for the same product.
    • Multiple tiered (scale) pricing options groups for the same product pricing configuration.

Impact on new acquisitions

Usage pricing does not impact new acquisitions and only takes effect when subscribers renew subscriptions with a metered resources cost component. When first purchasing products with usage pricing components, shoppers pay the costs of the first billing cycle in advance. Avangate charges metered resources consumed in arrears at the start of a new billing cycle when the subscription expires/renews for the previous billing cycle.

How does usage billing work?

Let's assume that you operate a newsletter service and you charge $1 per message for the 1 to 1,000 interval, $2 per unit for 1,001 to 10,000 interval and $3 per unit for volumes exceeding 10,000 items sent. Customers subscribing to your service also pay a monthly fee of $99.99.

Let's assume that Customer A uses the service to send out newsletters to 800 email addresses in April 2016 while Customer B sends out 5,000 newsletters the same month.

 

 

Service base plan

April 2016 usage costs

Total cost paid in May 2016

Customer A

$99.99

$1 * 800

$899.99

Customer B

$99.99

$2 * 5,000

$10,099.99

Workflow

Initial purchase

Shopper acquires subscription - pays initial acquisition price, does not pay any usage costs starting off.

Usage upload 

The Avangate system provides a total of 10 daily notifications for all subscriptions with a usage cost component. You receive the first notification five (5) days before the end of the billing usage interval you configured. Avangate sends out the last notification, five (5) days after the end of the billing usage interval you configured.

Avangatestops notifying you to upload usage for subscriptions starting from the moment you complete the process, or after sending out the 10 notifications.

Usage upload

You are required to upload usage

It's mandatory to provide metered resources consumed ensuring that Avangate charges customers and renews usage-based subscriptions when due, without impacting your revenue stream.

Uploading usage enables Avangate to move ahead with the renewal and billing process. You have the option of uploading usage with zero (0) value, in which case Avangate charges subscribers only the flat rate for their subscriptions. You'll be able to upload unbilled usage at a later date, deferred to a subsequent billing period.

 

Upload usage across successive billing cycles

Avangate limits usage upload to the current billing cycle with one exception. For Past Due subscriptions, you can report usage data for both the past and the current billing cycle, as long as the billing interval has not past.

For example, let's asume that Subscription A expires on August 31 and you set a billing interval of 5 days. 

Usage

Upload usage for August

Upload usage for September

Aug 1st  to 31st

Yes

No (outside of current billing cycle)

1-Sep

Yes

Yes

2-Sep

Yes

Yes

3-Sep

Yes

Yes

4-Sep

Yes

Yes

5-Sep

Yes

Yes

6-Sep

No (outside of current billing cycle and past the billing interval)

Yes

Failure to upload usage

Default setup: Subscriptions with a usage component for which you do not upload the metered resources consumed the end of their grace period will expire. Avangate does not charge the customers and does not renew the subscriptions automatically. Additionally, subscribers are not be able to renew their subscriptions manually if you did not upload usage data.

Consider uploading usage with zero (0) value to enable Avangate to charge customers only the flat rate for their subscriptions. You'll be able to upload unbilled usage at a later date, deferred to a subsequent billing period.

 

Custom setup: You have the option of choosing a custom setup that does not bind subscription renewal to the status of usage uploaded.

When

Billing

No usage uploaded

Usage uploaded partially

Usage uploaded for the full billing cycle

Renewal/Expiration deadline is the end of the billing cycle plus the number of days set as the billing interval

Recurring

Avangate charges only the subscription fee.

Avangate charges the subscription fee plus the costs for the metered resources you reported as consumed for a part of the billing cycle.

Avangate charges the subscription fee plus the costs for the metered resources you reported as consumed for the entire billing cycle.

Manual payments

Avangate activates the manual payment link and customers pay only the subscription fee to renew.

Avangate activates the manual payment link and customers pay the subscription fee plus the costs for the metered resources you reported as consumed for a part of the billing cycle.

Avangate activates the manual payment link and customers pay the subscription fee plus the costs for the metered resources you reported as consumed for the entire billing cycle.

Contact Avangate to start using this feature.

 

Failure to process usage

The Avangate system reports the status of usage processing following your upload. If the process fails, please correct the errors reported and try again.

Renewal notifications 

At the end of the billing cycle plus the number of days set as the billing interval, the Avangate system sends out renewal notifications to customers according to the renewal notification settings you configured for your products.

Recurring charges

Avangate charges the customer the sum of the recurring costs and the fees for the metered resources consumed at the end of the usage billing interval you set.

 

Subscription renewal interval is smaller or equal to six (6) months

The Avangate system attempts to charge customers according to their time zone at a maximum of three (3) hours prior to the expiration of the usage billing interval (expiration date + the number of days set as the usage billing interval).

 

Subscription renewal interval is larger than six (6) months

Avangate makes the first attempt to charge shoppers two (2) days prior to the expiration of the usage billing interval (expiration date + the number of days set as the usage billing interval). Avangate then makes a subsequent attempt, one day before the expiration of the usage billing interval.

Avangate notifies the customer of the renewal order and the automatic charge.

Manual payments

Customers have the possibility to renew their subscriptions through manual payments at the end of the billing cycle plus the number of days set as the billing interval, as long as the grace period hasn't also expired.

Outstanding usage 

Customers with expired subscriptions receive notifications from Avangate to pay outstanding usage cost. However, the finalization of transactions has no impact on the status of expired subscriptions.

Post-expiration 

Avangate makes three (3) attempts to charge customers for the outstanding usage costs after their subscriptions expire on days 1, 3 and 5, in the eventuality that they haven't paid the metered resources they consumed, but only provided that they enabled the auto-renewal system (opted in for recurring charges).

 

Configure usage billing

There are two components to setting up usage billing:

  1. Setting the usage billing interval
  2. Configuring the usage pricing option

 

Set the usage billing interval and the grace period

The usage billing interval is the interval of time within the grace period, when the Avangate system attempts to automatically charge customers for recurring costs and additional metered usage fees (in arrears) or activates manual payment links. Avangate renews subscriptions only after customers make outstanding payments, per the renewal settings of your products (prolonging the lifetime from the expiration or the renewal dates).

If automatic renewal and usage charges fail, subscribers can manually renew  their subscriptions only by the end of the grace period.

Set a global usage billing interval

The usage billing interval must be smaller than or equal to the grace period.

  1. Navigate to Renewal under Setup, and select the Global Renewal Settings tab.
  2. The Usage billing interval setting is in the area at the top of the screen, to the right of the menu that allows you to set a global grace period for your subscriptions. Select a value: 5, 7, 10 or 14 days. Make sure it's smaller or equal to  the number of days for the grace period setting on the same page. 

This usage billing interval impacts all subscriptions with metered cost components, but you can override it by per-subscription usage billing interval settings.

If you set the grace period value to a value smaller than the usage billing interval, the unsupported options from the usage billing interval are removed and the maximum possible value is automatically selected.

Set a per-subscription usage billing interval

  1. Navigate to Products under Setup.  Search for the product for which you wish to set per-subscription usage billing interval and edit it.
  2. Select the Renewal tab.
  3. The Usage billing interval setting is in the Subscription Settings area at the top of the screen, just below the options designed to let you configure a per-subscription grace period.
  4. Select the Set custom grace period for this product Grace period option and set the desired values. Note: These settings will impact only the subscriptions associated with the product you're configuring, and will override any global renewal settings.
Usage interval possible values (in days):
  • 0 - Avangate attempts to automatically charge customers for recurring costs and metered resources used on the subscription expiration date, for items with the auto-renewal system enabled for which you uploaded usage or for which you're not required to report metered resources consumed.
  • 1 to 14 - Avangate attempts to automatically charge customers for recurring costs and metered resources used five (one to 14) days after the subscription expiration date, for items with the auto-renewal system enabled for which you uploaded usage or for which you're not required to report metered resources consumed.

For subscriptions for which customers opted out of recurring billing, Avangate only generated manual payment links and sends them to customers as part of your renewal notifications setup.

Configure usage pricing option for your subscriptions

To add a usage component to a subscription you need to create a new pricing options group for metered resources. 

  1. Navigate to Products under Setup, search for or add/import the product you want to set usage pricing and click to edit it.
  2. Select the Pricing tab and click to Edit the Pricing configuration that will be used to define usage costs. You can also create a new pricing configuration. Note: the type of the pricing configuration must be With base price. Usage billing is not available for pricing configurations Without a base price.
  3. On the editing screen of the pricing configuration, scroll down to the bottom and click on Create new pricing options group in the Pricing options groups area.
  4. Select the language of the pricing options group and enter a unique Group name and a description (optional).
  5. Select the type of the option. For the purposes of this tutorial, choose Scale.
  6. Once the Scale option is selected, you will be able to further define the type of the scale: Pay per usage.
  7. Enter a unique code (alphanumeric/string) to help you manage usage billing when importing/uploading usage.
  8. Click to add the first scale.
  9. Define the scale usage intervals. Important: When configuring scales, it's mandatory to specify the price for each currency active for your account. Customers in specific markets pay the price defined for the local currency. 
  10. When you're done defining the scale usage intervals click Save groupLocalization: To localize the usage pricing options group to another market, select the desired language from the list of options available for your account and repeat the steps described above.
  11. The newly created pricing options group is available on the pricing configuration edit page. Scroll down to the bottom of the screen to identify it by the unique name you assigned to it in the Available pricing options groups area and click the Use with this product link.
  12. Hit Save to associate the usage pricing options group with the pricing configuration you're editing.

Avangate does not support multiple usage pricing options groups for the same product at this point in time.

Editing usage options 

Deactivating usage pricing options groups 

You can deactivate usage pricing option groups only in scenarios in which all subscriptions sold to customers are inactive, namely have been canceled or expired. As long as there are active subscriptions for products sold through Avangate, including those in grace period (featuring the Past Due status), the usage pricing options group cannot be disabled.

Editing usage pricing option groups 

You cannot change the type of a scale (usage) pricing options group once defined. However, you can edit the options of the usage scale. 

Usage upload notifications

The Avangate system is designed to supply you with notifications facilitating the usage uploading process.

  1. Emails are sent out daily starting 5 (five) days ahead of the end of the billing usage interval you configured, and for 5 (five) days after that. The Avangate system provides a total of 10 daily reminders. You receive the emails at the Customers Support Email (set under Account Information in Account Settings), Avangate specifies the subscriptions for which you need to upload usage.
  2. The Avangate system provides notifications if the usage upload process completed successfully.
  3. In addition, Avangate provides notifications to share information on eventual uploading process issues and errors that need correcting.
  4. Once you uploaded usage and Avangate processes it successfully, the system sends out renewal notifications to customers, informing them of the impending subscription auto-renewal, or inviting them to manually renew their subscription, depending on whether the auto-renewal system is enabled or not. Avangate can do the same regardless of the status of uploaded usage, but you need to use a custom setup - contact us directly. 

Upload usage 

Upload usage using a tool in the Control Panel. You need to create .CSV (comma separated values) file for the subscriptions with a usage cost component which need to be renewed.

Build the CSV import file

To upload usage for subscriptions with a metered resources component, you need to create a CSV (comma separated values) file with the structure described below:

 

Field name

Type

Required

Can be empty?

Description

LicenseUniqueId

string

Your unique identifier for the subscription - maximum 250 characters. LicenseUniqueId is a unique identifier that is stored into the Avangate system and can subsequently be used for management tasks impacting subscriptions. LicenseUniqueID must match the external identifier associated with a subscription already in the Avangate system. 
Note: This field can be empty only if theLicenceCode is not empty.

LicenceCode

string

Avangate unique subscription reference.LicenceCode is a unique identifier that is stored into the Avangate system and can subsequently be used for management tasks impacting subscriptions.

OptionCode

string

Unique codes you provided as identifiers of specific Pricing Options in the Usage Scale Pricing Options Group scheme.

Units

numeric

The value of the metered resources consumed by customers with usage-based subscription in a specific time interval defined with the help of the StartDate and EndDate.

Cannot be empty, but you can upload 0 (zero) usage for subscriptions to enable the Avangate system to renew them and charge customers the base recurring costs, without the cost component of the metered resources consumed.

StartDate

date[time]

Format: YYYY-MM-DD. Defines the beginning of the usage interval. For example, when uploading usage for May 2013, the start date is 2013-05-01 while the end date is 2013-05-31.

StartDate for the usage uploaded has to be the same as the subscription Purchase date, or later.

Use the same time zone as for API - System settings.

EndDate

date[time]

Format: YYYY-MM-DD. Subscription expiration date. Defines the end of the usage interval. For example, when uploading usage for May 2013, the start date is 2013-05-01 while the end date is 2013-05-31.

EndDate for the usage uploaded has to precede or be the same as the Expiration date of the subscription.

Use the same time zone as for API - System settings.

 

Alternatively, you have the option of downloading a sample CSV file made available by Avangate. To do this:

1. Make your way to the Renewal area of the Control Panel and select the Usage tab.

2. Click the Download usage file template link in the Upload usage data area, and save the sample locally. Open the CSV file, and edit it, making sure to meet the structure described above.

requirements:

  1. Usage intervals need to be contained within the subscription billing cycle:
    • StartDate cannot precede the subscription purchase date.
    • EndDate cannot come after the subscription expiration date.
  2. When you upload usage using multiple intervals, such as weekly for a monthly subscription, the intervals defined by StartDate and EndDate values need to be continuous, and should not overlap.
  3. In addition, the usage brackets/intervals need be continuous. You should make sure that there are no gaps in between them, namely periods of time for which no usage is uploaded.
  4. Avangate processes subscriptions with metered resource components only when the interval for the usage uploaded covers the full span of the billing cycle, from start to finish. Essentially, you need to upload usage data for the entire subscription billing cycle, from the purchase date, which needs to be the same as StartDate to the expiration date, which needs to match the EndDate. Contact Avangate if you want to enable subscription renewal regardless of whether you uploaded no/partial/full update data. 
Example:

Let's assume that you need to upload Subscription A usage for June 2013. Subscription A, governed by a monthly billing cycle, was purchased on June 1st, and is set to renew/expire on June 30th. You defined a grace period of 2 weeks, and a usage billing interval of 5 days. You can upload usage:

  1. Using a single upload task - in this case, your CSV file features a single usage interval, namely 2013-06-01 (StartDate) and 2013-06-30 (EndDate).
  2. Using multiple upload tasks:
  •  2013-06-01 (StartDate) and 2013-06-08 (EndDate)
  •  2013-06-09 (StartDate) and 2013-06-15 (EndDate)
  •  2013-06-15 (StartDate) and 2013-06-22 (EndDate)
  •  2013-06-23 (StartDate) and 2013-06-30 (EndDate)

Upload the CSV file

Once the CSV file created, you can upload usage for subscriptions using the Avangate Control Panel.

  1. Navigate to the Renewal area of the Control Panel and select the Usage tab.
  2. Click the Choose file button in the Upload usage data area, and locate the CSV file on your computer.
  3. Click the Upload file button.

As long as the usage has not been processed, you can delete the uploaded CSV files.

Once the usage was processed by the Avangate system, you will only be able to download the CSV files, but not to remove them, or the uploaded data.

Error handling

The Avangate system provides notifications when the processing of the CSV file with the usage data uploaded fails. Emails are sent automatically to the address under Customers Support Email (set in Account Information > Account Settings), specifying the lines in the CSV file for which usage processing was unsuccessful.

Avangate uploads CSV files and processes the usage data successfully only if no errors impact the process. Please correct all issues reported in the notifications and re-upload the CSV file entirely for the data to be processed.

 

What if the data for only a few subscriptions or a single item was incorrect? Will the rest of the usage data be processed?

No. Please make sure that you deal with the errors reported by the Avangate system and re-upload the full CSV file.

Upload 0 (zero) usage

You have the option of uploading 0 (zero) usage for subscriptions with a metered cost component. Providing at least 0 usage when no other data is available will give green light to the Avangate system to charge customers at least for the next billing cycle of the subscription and trigger the renewal process.

Subscription details page update

The subscription details page was updated with a new area designed to centralize information on the usage uploaded and its impact..

Usage for trial subscriptions

You can offer trials for subscriptions with a usage pricing component. Trials behave the same as the evaluation versions of regular, non-usage subscriptions, meaning that you are not required to upload usage. The Avangate system automatically charges customers for the full product price and converts the trial to a paying subscription, if they provided credit card data and unless they opt-out during the trial period. Avangate starts charging metered resources consumed at the end of the first billing cycle, when the converted subscription is scheduled to renew/expire.

Trials in the Avangate platform do not have a dynamic, pay-per-use component for metered resources consumed. Please take this into account when offering trials to your customers for subscriptions with usage pricing.

FAQ

What happens when subscriptions with a usage cost component are canceled?

The Avangate system does not attempt to renew or charge customers for canceled subscriptions, nor will it send out any notifications. Instead, consider disabling the automatic billing process to enable Avangate to collect outstanding usage payments.

 

Can subscriptions with a usage cost component be sold to partners via Channel Manager?

This functionality is not supported at this point in time.

 

Do discounts apply to the entire value of renewal orders?

Yes. Discounts apply to the entire value of the renewal order, including usage costs.

 

Do affiliates get commission from the entire value of the entire order?

Yes, but only if you're offering your affiliates commissions for renewal subscriptions.