Is variable (tiered) usage-based billing compliant?

Shopify App Store
1

Hi everyone,

I am currently implementing usage-based billing for my app and want to use a variable pricing model (volume discounts).

The Goal: I want the cost per unit to decrease as the merchant uses more of the service within a billing cycle. (e.g., The first 100 orders are charged at $1.00, but any orders after that are charged at $0.80).

The Question: While I haven’t found any documentation that explicitly forbids this, I also haven’t found any docs that explicitly confirm it is a standard/allowed practice.

Has anyone else implemented a tiered usage model like this? Are there any specific policy docs I should be aware of, or is it fully compliant as long as I clearly communicate the tiers to the merchant before they approve the charge?

Thanks in advance for your help!

2

Yes this is definitely possible within the bounds of the usage based charges API.

However, it is challenging in practice.

This is because the current app subscription API doesn’t have great tooling around understanding the current billing cycle. You only have access to the current period end date, which in reality isn’t exactly accurate.

So it’s difficult to time when a merchant’s period ends and another starts, since the billing anchor dates are dynamic.