AI agent monetization
AI agent monetization is how a product charges for autonomous AI agents that perform multi-step work. Pricing ties to the work an agent does, such as tasks, outcomes, or tokens consumed, rather than to seats.
Glossary
Billing & Pricing Glossary
Clear, neutral definitions for the billing, pricing, and revenue terms that come up when you monetize an AI or SaaS product — with examples and how each concept works in practice.
AI credits
AI credits are a prepaid unit of value a customer buys and spends on a product's AI features. Each action consumes credits, which abstract the underlying token or compute cost into one simple unit.
AI pricing models
AI pricing models are the ways AI products charge for value: per token, per request, per seat, per outcome, or a hybrid. They map price to the consumption or results an AI feature delivers.
AI token pricing
AI token pricing charges customers per token of model usage, where a token is a chunk of text (roughly four characters) the model reads or writes. Cost scales with consumption instead of a flat per-seat fee.
ASC 606
ASC 606 is the US accounting standard for recognizing revenue from contracts with customers. It defines a five-step model for when and how much revenue a company records as it satisfies its obligations.
Annual contract value (ACV)
Annual contract value (ACV) is the average yearly revenue of a single customer contract, excluding one-time fees. Total contract value (TCV) is the contract's full value across its entire term.
Annual recurring revenue (ARR)
Annual recurring revenue (ARR) is the predictable subscription revenue a company expects over a year, normalized to an annual figure. It counts recurring contracts only, excluding one-time fees and uncommitted usage.
Billing engine
A billing engine is the system that turns usage and subscription data into charges. It rates events, applies pricing and discounts, manages balances and invoices, and tells the payment processor what to collect.
Billing in arrears
Billing in arrears means charging a customer after they have used a product or service, at the end of the billing period. It is the opposite of billing in advance, where payment is collected upfront.
Billing models
A billing model is the structure a business uses to charge customers, such as flat subscription, usage-based, or hybrid. It defines what triggers a charge and how the amount is calculated.
Billing vs invoicing
Billing is the broad process of determining what a customer owes and collecting it. Invoicing is one step within billing: producing and sending the document that itemizes the amount due.
Cloud billing
Cloud billing is the metered, usage-based billing model used by cloud providers. It charges customers for the resources they consume, such as compute, storage, and bandwidth, measured continuously and billed per unit.
Credit grants
A credit grant adds a defined amount of usable balance to a customer's wallet, such as bundled plan credits, a promotion, or a paid top-up. In Credyt, grants stack and draw down by priority, each with its own rules.
Credit memo
A credit memo is a document a seller issues to reduce the amount a customer owes on a previously issued invoice. It records a credit for returns, overcharges, or adjustments without deleting the original invoice.
Dynamic pricing
Dynamic pricing adjusts a product's price in near real time based on demand, supply, timing, or customer segment, rather than holding a fixed price. The price changes as conditions change.
Enterprise billing
Enterprise billing is billing built for large organizations: high volumes, complex contracts, custom pricing, multiple entities and currencies, and strict revenue recognition and audit requirements.
Entitlements
Entitlements are the rules that define what a customer is allowed to access and how much they can use, based on the plan they bought. They turn a purchased plan into enforceable limits and feature access.
Feature-based pricing
Feature-based pricing charges customers according to which features they can access. Plans are differentiated by feature sets, so customers pay more to unlock more capabilities rather than for usage or seats.
Flat-rate pricing
Flat-rate pricing charges a single fixed price for a product, with full access and no variation by usage or user count. Every customer pays the same amount for the same offering.
Hybrid pricing
Hybrid pricing combines a fixed recurring fee with usage-based charges. Customers pay a base subscription that includes an allowance, then pay for consumption beyond it, blending predictable revenue with usage upside.
Invoice automation
Invoice automation is software that generates, sends, and tracks invoices without manual work. It pulls billing data, applies pricing and tax, issues the invoice, and reconciles payment automatically.
Lifecycle pricing
Lifecycle pricing sets and adjusts a product's price across the stages of its market life, from launch through growth, maturity, and decline, to match changing demand, competition, and cost.
Marginal-cost pricing
Marginal-cost pricing sets the price of an additional unit at the cost of producing that unit. It is a pricing floor concept: selling at marginal cost covers variable cost but contributes nothing to fixed costs or profit.
Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) is the predictable subscription revenue a company earns each month from active recurring plans. It excludes one-time fees and uncommitted usage, and is the monthly view of recurring run-rate.
Multi-entity billing
Multi-entity billing is billing across several legal entities under one company, each with its own currency, tax rules, and accounting, while consolidating revenue for group-level reporting.
Net revenue retention (NRR)
Net revenue retention (NRR) is the percentage of recurring revenue retained from existing customers over a period, including expansion and after subtracting downgrades and churn. Above 100 percent means the base grows without new customers.
Outcome-based pricing
Outcome-based pricing charges customers for results delivered rather than for usage or access. The price ties to a defined outcome, such as a resolved ticket, a qualified lead, or a completed task.
Overage charges
Overage charges are fees a customer pays for usage beyond what their plan includes. When consumption exceeds the plan's allowance, each additional unit is billed at an overage rate.
Pay-as-you-go pricing
Pay-as-you-go pricing charges customers only for what they consume, with no fixed fee or commitment. Each unit of usage is billed at a set rate, so cost scales up and down directly with use.
Pay-what-you-want pricing
Pay-what-you-want (PWYW) pricing lets customers choose how much to pay for a product, sometimes above a minimum or a suggested price. The buyer sets the final amount.
Per-customer cost attribution
Per-customer cost attribution links the underlying vendor costs of usage to the specific customer who caused them. It reveals real gross margin per customer, workload, or feature, not just aggregate revenue.
Perpetual license
A perpetual license is a software license bought once that grants the right to use the software indefinitely. The customer owns the license outright, usually with optional paid maintenance for updates and support.
Pre-authorization
Pre-authorization is checking a customer's balance and approving a usage event before it runs. In Credyt, the platform authorizes each action against the wallet first, then the event proceeds and is debited.
Price anchoring
Price anchoring is presenting a reference price that shapes how customers judge other prices. A high anchor makes subsequent prices feel reasonable, guiding the customer toward a target option.
Price benchmarking
Price benchmarking is comparing your prices against competitors and market references to judge where you stand. It informs pricing decisions by showing how your rates compare on equivalent value.
Pricing automation
Pricing automation uses software and rules to set, adjust, and apply prices without manual intervention. It spans automated rate cards, dynamic pricing, and programmatic discounts applied at billing time.
Pricing matrix
A pricing matrix is a table that lays out plans against features or quantities, showing the price for each combination. It helps customers compare options and helps teams design and communicate pricing.
Pricing strategies
Pricing strategies are the structured approaches a business uses to set prices, balancing cost, customer value, and competition to maximize revenue and adoption. Common ones include cost-plus, value-based, and competitive pricing.
Proration
Proration is adjusting a charge to cover only the portion of a billing period a customer actually used. When a plan starts, changes, or ends mid-cycle, the bill is split proportionally to the time or quantity.
Quote-to-cash
Quote-to-cash is the end-to-end business process from generating a customer quote through to collecting and recognizing payment. It spans pricing, quoting, contracting, ordering, billing, payment, and revenue recognition.
Rate card
A rate card is the published list of prices for each unit a product charges for, such as per API call, per GB, or per token. It is the reference that turns metered usage into a billable amount.
Real-time billing
Real-time billing rates and applies each usage event the moment it happens, and can check a customer's balance before the event runs. Charges settle continuously rather than at the end of a billing cycle.
Real-time monetization infrastructure
Real-time monetization infrastructure is the system layer that meters, authorizes, and bills usage the moment it happens. It collapses metering and billing into one operation so revenue and control are live, not month-end.
Recurring billing
Recurring billing automatically charges a customer a set amount on a fixed schedule, such as monthly or yearly, for ongoing access to a product or service. It continues until the customer cancels.
SaaS billing
SaaS billing is the process of charging customers for software delivered as a subscription or usage-based service. It covers plans, metering, invoicing, payments, and revenue recognition for recurring software revenue.
SaaS churn rate
SaaS churn rate is the percentage of customers or revenue lost over a period. It measures how fast a subscription business loses customers (customer churn) or recurring revenue (revenue churn).
SaaS pricing models
SaaS pricing models are the structures software companies use to charge for a subscription product, including flat-rate, per-seat, tiered, usage-based, and hybrid. Each maps price to a different driver of value.
Seat-based pricing
Seat-based pricing charges per user (seat) who can access the product. The bill scales with the number of seats, regardless of how much each user consumes or which features they use.
Self-billing
Self-billing is an arrangement where the customer (buyer) generates the invoice on behalf of the supplier, rather than the supplier issuing it. It is common in marketplaces and high-volume supplier relationships.
Software monetization
Software monetization is the strategy and mechanisms a company uses to generate revenue from software, spanning pricing, packaging, licensing, billing, and enforcement of what customers pay for.
Stepped pricing
Stepped pricing (or stairstep pricing) charges a fixed price for each usage band, jumping to the next price when usage crosses a threshold. The whole band is billed at one flat amount rather than per unit.
Subscriber churn
Subscriber churn is the number or percentage of subscribers who cancel over a period. It measures customer loss by count, regardless of how much revenue each lost subscriber represented.
Subscription management
Subscription management is the system that handles the full lifecycle of a recurring plan: signups, upgrades, downgrades, pauses, renewals, and cancellations, along with the billing changes each one triggers.
Tiered pricing
Tiered pricing offers a product at several preset levels, each bundling more features or capacity for a higher price. Customers self-select the tier that fits, such as Basic, Pro, and Enterprise.
Time-based pricing
Time-based pricing charges by the amount of time a product or service is used or accessed, such as per hour, per day, or per minute. Cost scales with duration rather than with units consumed.
Unearned vs deferred revenue
Unearned revenue and deferred revenue are the same thing: money received for goods or services not yet delivered. It is recorded as a liability and recognized as revenue once the obligation is satisfied.
Usage-based pricing examples
Usage-based pricing examples are real-world cases of charging by consumption, such as per API call, per token, per GB, or per compute-hour. They show how different products meter and price the unit that drives their cost.
Van Westendorp pricing model
The Van Westendorp Price Sensitivity Meter is a survey method that finds an acceptable price range by asking customers four questions about what price feels too cheap, cheap, expensive, and too expensive.
Wallet-based billing
Wallet-based billing gives each customer a prepaid balance, a wallet, that usage draws down in real time. In Credyt, wallets hold multiple assets, such as dollars, tokens, or credits, in one balance.
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