A billing or pricing model used in various industries where customers are charged based on their actual usage or consumption of a service or product. Here’s how it works in a broader sense:
- Usage-Based Billing: PAYG pricing models calculate charges based on the quantity or level of usage. Customers pay for the specific amount of service they use, whether it’s data transfer, telecommunications, cloud computing, software usage, or any other service.
- No Fixed Commitments: PAYG typically does not require customers to commit to long-term contracts or subscriptions. Instead, users can use the service on-demand and are billed accordingly.
- Cost Efficiency: PAYG can be cost-effective for customers with varying or unpredictable usage patterns. It allows them to avoid paying for unused capacity or services and ensures they only pay for what they use.
PAYG models are popular in industries where flexibility and scalability are essential, as they enable users to scale their usage up or down as needed, making it a practical and cost-efficient approach for many businesses and individuals.
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