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PREPAID

Pay first—>Use later prepaid subscription is a billing model in which the customer pays the subscription amount in advance, and only after the payment is successful is the customer granted access to the service. A prepaid subscription requires the customer to pay before accessing the service. The recurring amount is also collected before each renewal of the subscription.

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Configuration

Create Subscription request
If billAtStart is not supplied in the Create Subscription API, the backend treats it as true, and the subscription follows the prepaid model.
Examples include Netflix, Spotify, Microsoft 365, memberships, and other services where access follows successful payment.

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Creation and Activation

  1. The merchant calls the Create Subscription API with billAtStart: true.
  2. The subscription enters the PENDING state.
  3. TransactBridge returns the subscription ID and payment URL.
  4. The customer completes the initial payment using available payment methods through the hosted checkout at TransactBridge or through SDKs (Dropin or iframe).
  5. After successful payment, the subscription becomes ACTIVE and service access can begin.

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Renewal and Collection

At the start of each renewal cycle, TransactBridge generates the invoice and attempts to collect the amount before the next service period begins. If collection succeeds, access continues. If it fails, the configured retry, due, overdue, and unpaid-invoice policies are applied.
Figure : Prepaid subscription activation and renewal flow
Example: Consider a Monthly plan On 1st August, the customer pays ₹999 and receives access from 1st August to 31st August. Before the next period begins on 1st September, the renewal amount is automatically debited. If the renewal succeeds, access will continue for the next month.

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POSTPAID

Use first—>Pay Later a postpaid subscription is a billing model where the customer consumes the service first and pays later, at the end of the billing period. This model is intended for businesses where the final amount depends on the customer’s usage during the billing cycle, such as metered or resource-based billing. A postpaid subscription allows the customer to use the service first and pay later. Charges are determined after the billing period based on the configured billing model, contract, or actual usage.

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Configuration

Create Subscription request
Note: No initial full amount is collected at the beginning of the billing period, but to make sure at the end of cycle platform is able to deduct the amount from customer timely, a payment mandate must be authorized by the customer for future debits. Examples include cloud services, utilities, and telecom postpaid plans.

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Creation and Activation

  1. The merchant creates the subscription with billAtStart: false.
  2. The subscription enters the PENDING state.
  3. TransactBridge returns the subscription ID and payment URL.
  4. The customer completes the hosted checkout by adding or authorizing a payment mandate, such as a UPI AutoPay or debit/credit card Mandate.
  5. After successful authorization, the subscription becomes ACTIVE. The customer does not need to pay the first postpaid invoice to activate the subscription.

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Invoice Generation and Approval

  • Billing cycle end: TransactBridge generates an invoice at the end of the billing cycle.
  • Billing Date Anchor: If configured, the invoice is generated on the fixed anchor date like 5th of the month irrespective of when the subscription actually starts.
  • Draft invoice webhook: TransactBridge sends the merchant a draft invoice webhook so that the merchant can update the invoice amount based on actual usage or billing inputs.
  • Approval window: The merchant has 24 hours to update and approve the draft invoice. If no action is taken within that period, the invoice is automatically marked as approved.
  • Collection: After approval, TransactBridge attempts to collect the approved invoice amount using the saved payment mandate.
Note: Draft invoice webhook & Approval window only applies to postpaid subscriptions. Prepaid subscriptions do not have this step as there is no metered billing that would change the invoice amount.
Figure: Postpaid usage, invoice approval, and collection flow
Business Example: Cloud services The customer uses cloud resources throughout August. At the end of the month, the total usage is calculated and an invoice is generated. The invoice may be updated and approved by the merchant, after which payment is collected using the customer’s saved payment mandate.
Comparison between Prepaid & Postpaid Subscription Model Selection