Usage-Based Billing System Overview

Purpose

The Usage-Based Billing System module is designed to calculate charges based on specific actions or usage patterns of users within an application. This module allows businesses to bill customers dynamically according to metrics such as minutes used, data transferred, API calls made, or credits consumed.

Benefits

1. Flexibility: Supports various billing metrics (e.g., time-based, data volume, number of transactions) to suit diverse business needs.
2. Transparency: Provides clear and itemized billing reports, enhancing user understanding and trust in pricing models.
3. Scalability: Automatically adjusts charges based on usage patterns, ensuring accurate billing as demand fluctuates.

Usage Scenarios

1. SaaS Applications: Ideal for platforms offering tiered pricing structures based on user activity or data storage requirements.
2. IoT Services: Useful for providers needing to charge devices per API call or data transmission.
3. Cloud Services: Perfect for environments where costs are tied to resource consumption, such as CPU usage or memory allocation.

This module empowers developers to implement a billing system that is both adaptable and efficient, catering to various business models and user needs.

Usage-Based Billing System: Key Features

1. Usage Tracking

• The module tracks user actions such as API calls, file storage, or data processed in real-time.
• It records and stores usage metrics accurately for billing calculations.

2. Dynamic Pricing Calculation

• Charges are calculated based on the recorded usage, offering flexibility to apply different pricing models (e.g., pay-as-you-go).
• The system supports tiered pricing, where costs increase with higher usage thresholds.

3. Subscription Management

• Manages subscription plans with features like tier-based billing and flexible term lengths.
• Handles auto-renewal with user notifications and options to modify or cancel subscriptions.

4. Payment Integration

• Integrates with third-party payment gateways (e.g., Stripe, PayPal) for secure transactions.
• Supports multiple payment methods and retries failed payments automatically.

5. Invoicing & Reporting

• Generates detailed invoices and receipts for each billing period.
• Provides comprehensive reports on usage history, charges, and payment statuses.

6. Discounts & Promotions

• Manages discount codes, coupons, and promotional offers to attract customers.
• Applies discounts accurately during the billing process based on eligible criteria.

7. Audit Trail & Compliance

• Maintains a detailed log of all billing-related activities for transparency and compliance purposes.
• Ensures secure storage of financial data and provides an audit trail for review.

This documentation is designed to assist developers in integrating and customizing the Usage-Based Billing System effectively.

Let’s break down the components for the Usage-Based Billing System:

1. FastAPI Endpoint

Here’s an example of a FastAPI endpoint that calculates usage-based billing:

from fastapi import APIRouter, Body
from typing import Optional
from pydantic import BaseModel

router = APIRouter()

class UsageRequest(BaseModel):
    userId: str
    minutesUsed: int
    creditsUsed: int
    date: str
    sessionCount: Optional[int] = None

class UsageResponse(BaseModel):
    userId: str
    totalCharge: float
    breakdown: dict

@router.post("/calculate-usage")
async def calculate_usage(request_data: UsageRequest = Body(...)):
    # Calculate charges based on usage
    minute_rate = 0.05  # $0.05 per minute
    credit_rate = 1.0   # $1.00 per credit
    
    total_minutes_cost = request_data.minutesUsed * minute_rate
    total_credits_cost = request_data.creditsUsed * credit_rate
    
    total_charge = total_minutes_cost + total_credits_cost
    
    breakdown = {
        "minutes": total_minutes_cost,
        "credits": total_credits_cost,
        "total": total_charge
    }
    
    return UsageResponse(
        userId=request_data.userId,
        totalCharge=total_charge,
        breakdown=breakdown
    )

2. React UI Snippet

Here’s a React component for capturing usage data:

import React, { useState } from 'react';

const UsageForm = () => {
    const [usageData, setUsageData] = useState({
        minutes: '',
        credits: ''
    });

    const handleSubmit = async (e) => {
        e.preventDefault();
        try {
            const response = await fetch('/api/calculate-usage', {
                method: 'POST',
                headers: {
                    'Content-Type': 'application/json',
                },
                body: JSON.stringify({
                    userId: '12345',
                    minutesUsed: Number(usageData.minutes),
                    creditsUsed: Number(usageData.credits),
                    date: new Date().toISOString()
                })
            });
            
            const data = await response.json();
            console.log('Usage Calculated:', data);
        } catch (error) {
            console.error('Error:', error);
        }
    };

    const handleChange = (e) => {
        setUsageData({
            ...usageData,
            [e.target.name]: e.target.value
        });
    };

    return (
        <div className="container">
            <h1>Usage Calculator</h1>
            <form onSubmit={handleSubmit}>
                <input
                    type="number"
                    name="minutes"
                    placeholder="Enter minutes"
                    value={usageData.minutes}
                    onChange={handleChange}
                />
                <input
                    type="number"
                    name="credits"
                    placeholder="Enter credits"
                    value={usageData.credits}
                    onChange={handleChange}
                />
                <button type="submit">Calculate Usage</button>
            </form>
        </div>
    );
};

export default UsageForm;

3. Data Schema (Pydantic)

Here’s the data schema for the billing system:

from pydantic import BaseModel
from typing import Optional

class UsageRequest(BaseModel):
    userId: str
    minutesUsed: int
    creditsUsed: int
    date: str
    sessionCount: Optional[int] = None

class UsageResponse(BaseModel):
    userId: str
    totalCharge: float
    breakdown: dict
    
    class Breakdown(BaseModel):
        minutes: float
        credits: float
        total: float
        
    breakdown: Breakdown

Explanation

1. FastAPI Endpoint: The /calculate-usage endpoint takes a UsageRequest model as input and returns a UsageResponse model with the calculated charges.
2. React UI: A simple form that collects usage data from the user and sends it to the FastAPI endpoint using fetch API.
3. Data Schema: Uses Pydantic models to define request and response schemas, ensuring proper validation and type checking.

These components work together to create a complete usage-based billing system where users can input their usage, get calculated charges, and developers can easily integrate with the API.

# Usage-Based Billing System Module

## Summary
The Usage-Based Billing System module charges users based on their actions, such as minutes used, credits consumed, or other specified usage metrics.

## Related Modules
- **Payment Gateway**: Handles transaction processing and payment methods integration.
- **User Authentication**: Manages user identification and access control.
- **Resource Tracking**: Monitors resource utilization for accurate billing.
- **Credit Balance**: Tracks and manages user credit balances.
- **Reports & Analytics**: Provides insights into usage patterns and billing trends.

## Use Cases
1. **Usage-Based Pricing**: Charge users based on the number of actions or resources used during a specific period.
2. **Tiered Billing**: Offer different pricing tiers depending on the level of usage (e.g., basic, standard, premium).
3. **Prorated Charges**: Calculate charges prorated for partial billing periods.

## Integration Tips
1. **Data Collection**: Ensure accurate and timely collection of usage data from various sources.
2. **Synchronization**: Periodically synchronize usage data with the billing system to avoid real-time overhead.
3. **Edge Cases**: Handle scenarios such as zero usage, overages, or sudden spikes in usage gracefully.

## Configuration Options

| Option Name               | Description                                                                 | Example Values                          |
|---------------------------|-----------------------------------------------------------------------------|----------------------------------------|
| `enable_usage_tracking`   | Enable or disable usage tracking for the billing system.                    | true/false                             |
| `billing_cycle`           | Set the billing cycle (daily, weekly, monthly).                           | "monthly", "weekly"                     |
| `usage_types`             | Define which actions or resources are tracked for billing purposes.        | ["minutes_used", "credits_consumed"]  |
| `tiered_pricing`          | Configure tiered pricing structure with usage thresholds and prices.       | [{"threshold": 100, "price": 50}]      |
| `prorate_charges`         | Enable prorated charges for partial billing periods.                       | true/false                             |
| `discount_codes`           | Apply discounts to usage-based bills.                                    | ["SUMMER20", "WELCOME10"]             |
| `failed_payment_handling`  | Configure behavior when a payment fails.                                  | "email_notification" or "suspend_access"|

## Key Considerations
- **Data Accuracy**: Ensure that the system collects accurate usage data to avoid billing discrepancies.
- **Performance**: Optimize the system for efficient data processing, especially with high volumes of usage data.
- **Legal Compliance**: Adhere to relevant laws and regulations regarding billing practices and user privacy.

## Glossary
- **Usage-Based Billing**: A pricing model where customers are charged based on their actual usage of a product or service during a specific period.

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This documentation provides a comprehensive guide for developers integrating the Usage-Based Billing System module into their applications.