Pay Per Use is a billing model in which the customer's specific usage of a service or product is metered and charged. It is widely used in consumer media (television, online services, etc.) and attracts customers seeking flexibility. In other words, the Pay Per Use model charges customers based on their actual usage, rather than a fixed rate. They are billed differently depending on the service, for example, based on the number of units used or the duration of use. A significant benefit for customers is that the source of incurred costs is highly transparent. Additionally, the pattern is quite fair, as customers who use a service sparingly pay significantly less. Conversely, because customers typically use services spontaneously, it may be difficult for a company to make an estimate of sales. To ensure reliable planning and consistent revenue, many businesses include a minimum usage requirement in their contracts, ensuring them constant returns.

When and how to apply Pay Per Use:

The Internet of Things is a networked world of intelligent products that sense and generate data and transmit it for analysis or intelligent adaptation. The Pay Per Use model derives its enormous potential from this new product-based capability for data collection and analysis. While technologies for measuring product usage have always existed, falling IT costs have enabled the development of new applications to strengthen business cases.
Well-known companies that use this pattern are Airbnb and Uber or Rolls-Royce with their aircraft engines.