Why prepaid credits are the next big thing

The use of prepaid credits is becoming increasingly popular among AI, data, and cloud infrastructure companies, and for good reason. So, what exactly are prepaid credits, and why the sudden rise in popularity?

What are Prepaid Credits?

Prepaid credits are a pricing model where users purchase credits upfront for future use. These credits can then be used to access products and services as needed. This model allows companies to create a uniform payment system within a complex and feature-rich business, offering benefits such as easy discount implementation, fraud prevention, and more.

Prepaid Credits vs. Other Pricing Models

Traditionally, tech companies have relied on seat-based pricing or pay-as-you-go models. However, these models often lack predictability, control, and flexibility for both companies and customers.

• Seat-based pricing: This model charges a flat price per user, regardless of usage. While simple, it can lead to wasted resources and a disconnect between value and price.
• Pay-as-you-go: Customers are charged based on their actual usage in this model. While more flexible, it can be unpredictable and difficult to budget for.

In contrast, prepaid credits offer a range of benefits:

• Predictability: Customers can purchase credits upfront, making budgeting and expense forecasting more manageable.
• Control: Customers have the power to select exactly what they want to use and pay for, aligning value with price.
• Extensibility: Companies can quickly implement discounts, promotions, and volume pricing by adjusting the cost per credit.
• Flexible purchasing decisions: Lower volume options offer fewer discounts but still allow users to explore the product before committing
• Fraud prevention: Prepaid credits help prevent runaway costs caused by malicious actors, as usage is limited to the credits available in an account.

The Industry Shift Towards Prepaid Credits

As the tech industry continues to grow and evolve, more companies are recognizing the advantages of prepaid credits. Thanks to its numerous benefits, this pricing model is already widely used from self-serve to enterprise plans.

As companies strive to provide a more customer-centric and flexible approach to pricing, prepaid credits offer a solution that benefits both businesses and their users. By leveraging prepaid credit models, they distribute value equally and create a better value-to-price ratio.

The shift towards prepaid credits is a reflection of the changing needs and expectations of tech companies and their customers. If your team is interested in making the shift, check out withorb.com/prepaid-credits.

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