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I'm a big fan of usage based billing. It lets small users have small bills. Per-seat pricing has always felt annoying to me. Ideally you want everyone at you

I'm a big fan of usage based billing. It lets small users have small bills. Per-seat pricing has always felt annoying to me. Ideally you want everyone at your company to be able to access the tools that everyone else uses (you don't want to create a bunch of second class citizens), but that gets really expensive really quickly. So per-user-per-month has never felt great to me. That said, usage-based billing is confusing. And when customers are confused, they simply chargeback the credit card charge. AWS can make it work, but I'm not sure if everyone else can. Will be interesting to see.

swyx 4y ago
> And when customers are confused, they simply chargeback the credit card charge. this is not good faith B2B behavior. i'd be surprised if 1% of B2B usage based billing customers behave like this.
- AnhTho_FR 4y ago
  I think B2B users would rather dispute the invoice with their account manager and might get a discount.
- jrockway 4y ago
  I agree that it's not good faith, but speaking from the position of someone who has offered self-service signup... that's what customers did. They'd create an account, start using the service, ignore emails from their account manager, and then dispute the bill when we charged their card. This is rare, of course, but it is something you have to expect when you give someone free reign to spend money and then bill them at the end of the month. It's something you have to expect, and kind of gauge how much money the customer has and send them lots of email as they approach a limit, and make it very clear in the UI that money is being spent that they will soon have to pay. Even then, who knows what people will do. It's bad faith on their part; you, the service provider, are the ones penalized.
kdeldycke 4y ago
Small bills are cool, until it's too small. I remember having to negotiate with Stripe the removal of their lowest limits. The quantum of unit I was billing on my cloud platform was such that you could consume just enough CPU and storage to end up with a $0.01 invoice at the end of the month. It was impossible for Stripe to process this payment. IIRC their lowest limit was $0.50 or $0.10. I guess they had this limit in place to prevent abuse and limit fraud. As we had similar hard-coded heuristics for the same reasons.
- paulgb 4y ago
  Small bills are funny. I'm surprised if the interchange fees don't net out negative for the biller. My most recent Rackspace bill was $0.05. I don't even remember what I'm using it for any more, but it's not worth it to check out. My last Pulumi bill was $0.86.
  - kdeldycke 4y ago
    > surprised if the interchange fees don't net out negative for the biller That's worth investigating! Now in a fictional, adversarial way, you can think of a bot exploiting this discrepancy to bankrupt a competitor: create dozens of fake accounts, consume just shy of $0.01 of resources, and have the platform pays 30x more in payment fees (public Stripe price is 30¢/transaction). To incur a net loss of $1,000,000, you’ll have to find an antagonist ready to create 3,448,276 accounts (1_000_000 / (0.30 - 0.01)), each with their own identity and mean of payment, for a total of $34,482.76. Fortunately this is highly impractical and will be caught real fast by your internal anti-abuse systems (you have those in place right?).
    - karambahh 4y ago
      Is it that impratical? Small players would be impacted by a 100k$ net loss...and you could even spread it out over several months to be less likely to be caught by anti-abuse systems...
- jrockway 4y ago
  I was in this position and Stripe let me carry over the line items until eventually an invoice was billable, if I recall correctly. Though I might have just manually waived these charges as a courtesy.

swyx 4y ago

> And when customers are confused, they simply chargeback the credit card charge. this is not good faith B2B behavior. i'd be surprised if 1% of B2B usage based billing customers behave like this.

AnhTho_FR 4y ago
I think B2B users would rather dispute the invoice with their account manager and might get a discount.
jrockway 4y ago
I agree that it's not good faith, but speaking from the position of someone who has offered self-service signup... that's what customers did. They'd create an account, start using the service, ignore emails from their account manager, and then dispute the bill when we charged their card. This is rare, of course, but it is something you have to expect when you give someone free reign to spend money and then bill them at the end of the month. It's something you have to expect, and kind of gauge how much money the customer has and send them lots of email as they approach a limit, and make it very clear in the UI that money is being spent that they will soon have to pay. Even then, who knows what people will do. It's bad faith on their part; you, the service provider, are the ones penalized.

kdeldycke 4y ago

Small bills are cool, until it's too small. I remember having to negotiate with Stripe the removal of their lowest limits. The quantum of unit I was billing on my cloud platform was such that you could consume just enough CPU and storage to end up with a $0.01 invoice at the end of the month. It was impossible for Stripe to process this payment. IIRC their lowest limit was $0.50 or $0.10. I guess they had this limit in place to prevent abuse and limit fraud. As we had similar hard-coded heuristics for the same reasons.

paulgb 4y ago
Small bills are funny. I'm surprised if the interchange fees don't net out negative for the biller. My most recent Rackspace bill was $0.05. I don't even remember what I'm using it for any more, but it's not worth it to check out. My last Pulumi bill was $0.86.
- kdeldycke 4y ago
  > surprised if the interchange fees don't net out negative for the biller That's worth investigating! Now in a fictional, adversarial way, you can think of a bot exploiting this discrepancy to bankrupt a competitor: create dozens of fake accounts, consume just shy of $0.01 of resources, and have the platform pays 30x more in payment fees (public Stripe price is 30¢/transaction). To incur a net loss of $1,000,000, you’ll have to find an antagonist ready to create 3,448,276 accounts (1_000_000 / (0.30 - 0.01)), each with their own identity and mean of payment, for a total of $34,482.76. Fortunately this is highly impractical and will be caught real fast by your internal anti-abuse systems (you have those in place right?).
  - karambahh 4y ago
    Is it that impratical? Small players would be impacted by a 100k$ net loss...and you could even spread it out over several months to be less likely to be caught by anti-abuse systems...
jrockway 4y ago
I was in this position and Stripe let me carry over the line items until eventually an invoice was billable, if I recall correctly. Though I might have just manually waived these charges as a courtesy.