# Top-Up Pricing (like OpenAI)

### Overview

Top-up pricing is a variation of usage-based pricing. Customers must make payments to purchase credits upfront. As the product usage occurs, credits will be deducted accordingly. When certain percentage of the top-up amount is reached, such as 20%, customers will be charged again up to top-up amount. This pricing model is especially popular among AI companies due to the model set-forth by OpenAI's API pricing.

### Enable Top-up Pricing

To enable top-up pricing, a product plan should be created with **Billing Cycle** be `Top Up`. In contrast to billing cycles being monthly or annually, the billing cycle is not driven by time, but by credit balance. The property **Recurring Fee Amount** on the product plan is the total top-up amount. Therefore, it is required to have a non-zero value of **Recurring Fee Amount** in order to use top-up pricing. Optionally, you can specify a property **Top Up Threshold** that triggers recharge of customers to the full top-up amount. By default, the threshold is 20% of full top-up amount. The customers' customer wallets inside Paigo are used to store credits recharged and keep track of the credit balance.

For example, if **Recurring Fee Amount** is $100 and **Top Up Threshold** is 20%, then a customer will be recharged if they started using product with $100 balance in credit and used the product until $20 remaining in balance. The recharging amount would be $80, which is the difference of full top-up amount and the current balance.

Below are some of the implementation mechanism of top-up pricing:

* Top-up product plan can be used only on `Usage-based` plan type. It does not support `Subscription-based` or `Fixed Price` plan types. Top-up product plan also does not support pricing features such as free trial and minimum payments.
* The credit consumption is calculated frequently as customers are using the product, and deducted from credit balance in customer wallet. Invoices will be generated for recharges of top-up product plan.
* Top-up pricing plan can be used only with `Metered Usage` product items. There is no limitation of how pricings of product items are defined, they will be calculated as part of credit consumption.