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A merchant can change the billing frequency of an existing subscription when the customer’s billing requirements change. A frequency change can be made between different billing intervals, such as:
  • Monthly to Quarterly
  • Monthly to Yearly
  • Quarterly to Monthly
  • Yearly to Monthly
When the frequency of an active subscription is changed, the treatment of the current billing period depends on whether the subscription is prepaid or postpaid. Transact Bridge uses the applicable proration basis to determine the credit or adjustment for the unused portion of the current subscription period.

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Prepaid Subscription

In a prepaid subscription, the customer pays for the service before the service period begins. When the billing frequency is changed during an active billing period, the unused portion of the existing prepaid period can be considered for a prorated credit adjustment against the new subscription frequency.

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Scenario 1: Monthly → Quarterly

Consider a customer with a monthly prepaid subscription:
The customer changes from monthly to quarterly billing on 16 August. The customer has already paid for the current monthly period. Since part of the current billing period remains unused, the applicable unused-period value can be calculated on a prorated basis. The resulting adjustment is applied when calculating the amount due for the new quarterly billing frequency.

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Scenario 2: Monthly → Yearly

A customer has paid for a monthly prepaid subscription and changes to an annual plan before the current monthly period ends. The unused portion of the current monthly subscription is considered for the applicable prorated credit adjustment. The adjustment is applied against the amount payable for the new yearly subscription.

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Scenario 3: Quarterly → Monthly

A customer has already paid for a quarterly prepaid subscription but wants to move to monthly billing. If the frequency change occurs before the end of the current quarterly period, the applicable unused portion can be considered as a prorated credit adjustment. The credit is then considered when determining the amount payable under the new monthly frequency.

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Prepaid Credit Adjustment Flow

For a prepaid subscription, the general flow is: The adjustment can be represented conceptually as:
The exact credit depends on the applicable subscription amount, billing period, frequency change, and remaining portion of the current billing period.

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Postpaid Subscription

In a postpaid subscription, the customer uses the service during the billing period and payment is collected after the billing period. When the billing frequency is changed, the primary consideration is the billing period in which the usage occurred and how the existing period is handled.

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Scenario 1: Monthly → Quarterly

Consider a customer using a monthly postpaid plan.
The customer changes to quarterly billing during the current period. The usage already accumulated under the existing billing period is considered according to the applicable billing and proration rules. The new quarterly frequency is then used for subsequent billing.

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Scenario 2: Monthly → Yearly

A customer using a monthly postpaid service changes to an annual billing frequency. The usage accumulated during the applicable billing period is considered before moving to the new billing frequency. Subsequent usage is then accumulated according to the yearly billing cycle.

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Scenario 3: Quarterly → Monthly

A customer on a quarterly postpaid subscription changes to monthly billing. The existing billing period and accumulated usage are considered during the frequency change. The subscription then follows the monthly billing cycle for subsequent periods.

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Postpaid Credit Adjustment Flow

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Important Considerations

  • A frequency change does not necessarily mean that the customer starts a completely new subscription.
  • For prepaid subscriptions, the unused portion of the existing billing period may be considered for a prorated credit adjustment.
  • For postpaid subscriptions, the existing billing period and accumulated usage/charges need to be considered when changing frequency.
  • The applicable credit or adjustment is determined based on the proration rules applicable to the subscription.
  • The new billing frequency applies to subsequent billing cycles after the frequency change.