The concept of prepaid credits with wallet-based models is among the most common modern variations on traditional usage-based pricing. This approach introduces greater predictability to the usage-based context as there is a regular agreed-upon payment amount each billing period with the ability to purchase additional credits as-needed to support surges in usage as they occur. This regular component simplifies the billing experience for customers and dramatically aids finance and accounting teams from both the vendor and customer to forecast the annual spend for revenue tracking and budgeting, respectively. At the same time, customers are secure knowing they are able to purchase additional prepaid Credits to handle any surge in demand if it should occur. A layer of automation can be added to this with so-called “top-up” functionality that triggers notifications to remind customers to purchase additional credits when the prepaid balance crosses a predetermined threshold.
Each billing period, say monthly for this example, a static fixed charge is billed to the customer, and a corresponding allotment of prepaid Credits are then added to the customer’s Prepaid Wallet in the form of a Prepaid Amount. For the regular purchase of Credits each month, the Prepaid Amount is set to expire at the end of the corresponding month (i.e. these Credits are only during the month for which they were purchased, they do not carry over across billing periods).
If the customer’s usage during a month is on track to exceed the Credits purchased, the customer has the option to purchase additional Credits in bulk as additional Prepaid Amount. These transactions are handled separately from the regular monthly charge; when purchasing additional bulk Credits, the Amount is set to expire one year from the purchase date. Therefore these Credits carry over between billing periods, unlike those purchased from the monthly fixed charge.
The real-time Wallet balance is calculated by taking the sum of any non-expired prepaid Cards in the Wallet and subtracting the aggregated usage for the billing period from that balance. It can be accessed at any time by querying the API endpoint, or viewing the Revenue Explorer and Customer Usage and Billing Portal.
Customers can manually monitor usage and Credit balance, then purchase additional Credits as necessary, or implement “top-up” processes, where the customer is automatically notified and pushed to purchase additional Credits via self-service or by engaging with a salesperson (who can also set notification to trigger outreach) once the Wallet balance has dipped below a certain amount.