Merchants have been able to buy Shopify Apps and pay for them through their Shopify invoice since we launched our app store. The experience of installing an app and paying for it with two taps has become core to the Shopify App Store experience.
Most of you are familiar with the two existing methods for processing charges related to your Shopify App: one-time fees and recurring subscription billing.
Now, we’re giving you more flexibility in the way you charge merchants: Introducing our new usage-based billing API.
What are usage-based app charges?
Usage-based app charges are designed for Shopify Apps that need to bill merchants for an ongoing fee that varies based on usage or consumption.
With the usage-based charge API, you can add an additional variable component on top of a regular subscription charge. The variable component can be charged as frequently as needed. A few common use cases include:
- Per time used — Charge based on the total amount of minutes or hours used.
- Daily / weekly rollup — Charge based on daily and weekly usage.
- When a threshold is reached — Charge based on when a merchant reaches or surpasses a maximum limit.
If you’d like to bill merchants for emails that you send, orders that you ship, or ads that you buy, this API is the ideal billing model for your app.
Here's how it works:
- Create a recurring application charge with the capped_amount property. The capped_amount will be the maximum in U.S. dollars that your app can charge to the merchant in a 30-day period.
Ask the merchant to accept the fee by redirecting them to the charge accept screen. The store owner will see a page that looks like this:
- If the merchant accepts your charge, it’s time to activate the fee.
- As the merchant consumes services, let Shopify know using our new usage-based charge endpoint. As with recurring and one-time fees, the merchant will be billed periodically for the app charges on their account. 80% of the revenue will be passed along to you through PayPal.
With usage-based charges, you now have full control over what and how you charge merchants. We hope that this makes Shopify's billing system accessible for more apps and business models than ever before.
You can learn more about usage-based charges and Shopify’s Billing API through our updated app billing documentation.