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In the last decade, usage-based pricing—often called pay-per-use or transactional pricing—has swept through the B2B technology world.
Instead of paying a fixed license or seat fee, businesses are charged by the transaction: API calls, compute hours, data processed etc. This model, which gained traction with the rise of cloud computing and SaaS, promises to align costs with actual value delivered. In theory, it’s flexible, efficient, and fair.
But as economic pressures mount and digital infrastructure matures, a growing number of businesses are re-evaluating this pay-as-you-go approach. What once looked like a shortcut to scalable success is now often a source of pain for product, engineering, and finance teams.
In this blog, we explore the reality of transactional pricing models and contrast them with emerging non-transactional approaches, like TravelTime’s unlimited usage, fixed fee model.
For companies scaling fast, innovating boldly, and managing tight budgets, the choice of pricing model can be a make or break—it’s time we discussed them more.
The Appeal of Pay-Per-Use
Let’s be fair. Usage-based pricing can be compelling, especially in the early days. There are a series of clear benefits to building technology safe in the knowledge that your business pays only for the services or tools that you use.
Usage-based pricing allows for:
Low barrier to entry
Businesses can get started quickly with minimal commitment.
Elasticity
You only pay for the resources that your business actually uses. If demand drops, so do costs.
Perceived fairness
There is no overpaying for idle capacity or unneeded features.
This is why the model works well for new projects and lean teams—it looks rational and justifiable to finance teams, the C-suite, and your investors.
The Hidden Challenges of Transaction-Based Pricing
As companies mature, the cracks in the transactional model begin to show. These models often trade short-term agility for long-term pain, and as such we see four big challenges emerge.
1. Budget Unpredictability and Cost Overruns
Transactional pricing introduces volatility. It’s hard to forecast spend when it’s tied to fluctuating usage. One surge, one botched integration, a spike in innovation and testing, or one successful campaign can lead to a startling invoice also known as “bill shock”. In fact, a new Flexera report shows that 84% of organisations struggle to manage cloud spend.
2. The “Taxi Meter” Effect
With every API call or compute cycle ticking up costs, developers start rationing usage. They’re working with one eye on the meter, so experimentation slows, innovation stalls, and teams avoid building new features just to keep costs in check.
3. Technical Lock-In
The more a business builds around a pay-per-use platform and integrates the technology deeper into their stack, the harder it becomes to move away. Deplatforming is expensive—both in engineering time and sunk costs.
Vendors know this and design their pricing to only increase with usage, not decrease.
4. Procurement and Billing Headaches
Complex pricing tiers, hidden fees, and unpredictable bills can paralyse procurement processes. Finance teams waste time deciphering contracts and invoices, often leading to further investment into their financial operations.
Why Vendors Love Pay-Per-Use
Let’s not forget transactional pricing works extremely well—for vendors.
Land and expand
Easy and fast onboarding leads to deep hooks and rising spend.
Invisible upsells
Revenue scales quietly in the background as customers grow.
Asymmetric incentives
Vendors win when customers lose control of spend or usage.
It’s a model designed to monetise growth passively, often without explicit buying decisions. And it’s increasingly out of step with how fast-moving and scaling teams want to build.
Gene Marks captured the problem with consumption-based business models, stating: “This is unlike anything we’ve seen in the past and it’s awesome… for the software providers. But what about users?”
The Rise of Non-Transactional Pricing
Enter the non-transactional model: flat-rate or unlimited usage pricing. Think of it like an all-inclusive subscription where businesses pay one fee for unlimited usage of technology.
This model is less common, but it’s gaining traction among companies prioritising predictability, velocity, and aligned incentives.
TravelTime has championed this approach from day one with our anti-consumption pricing—a radical rethinking of how technology and specifically location APIs should be sold.
Benefits of Non-Transactional Pricing
Fixed fee, non-transactional models come with serious advantages for consumers.
Predictable Budgets
Businesses know what they’ll pay each month or year—no surprises.
Freedom to Build
Developers can innovate freely without watching the “taxi meter” ticking up.
Scalability
Businesses can grow, relying on a provider that won’t punish success with a huge technology usage bill.
Faster Procurement
Simpler pricing reduces intra-departmental friction and contract negotiation is fast.
Aligned Incentives
Vendors focus on performance and value, not usage upsells.
A Balanced View: When Transactional Models Can Work
It’s not all bad. Transactional pricing can still work in low usage scenarios or short-term projects.
But for growing or large-scale organisations, releasing features frequently, and investing in long-term value, the flat-rate model becomes a strategic advantage.
Let’s take location APIs as an example.
If you’re building travel, logistics, or real estate products, you’ll need rich geospatial capabilities baked into your stack. Under a pay-per-call model, every route or travel time calculation has a cost. That limits experimentation and innovation, damaging the value that you can deliver to customers.
TravelTime’s unlimited location API flips this: use it as much as you need, innovate freely, and trust your bill will stay the same.
TravelTime’s Anti-Consumption Pricing: A Different Philosophy
At TravelTime, we took a stand against transactional pricing from day one.
We built the first unlimited-use, fixed fee location API because we believe in enabling innovation, not taxing it.
Our anti-consumption model removes the guesswork, the metering, and the penalty for success. We work with you to find a fair flat price that allows you to grow your business, so whether you perform 100s of hits or 10s of millions of hits in a month, your pricing stays the same. That’s how we align our growth with yours.
What’s Next?
We’re challenging the status quo in technology pricing.
In upcoming blogs, we’ll dive deeper into the challenges of transactional pricing, the opportunity or non-consumption-based pricing and how we’ve built both a pricing model and infrastructure that works for you.
Ready to stop the “taxi meter” and build without limits?
Get in touch to learn how our unlimited usage model can support your growth without compromise.