Pay as you go (PAYG) is a payment method for cloud computing that charges based on usage.

Typical contracts can be likened to mobile phone service subscriptions. Users pay for a certain level of service and if they exceed usage they might have to pay additional fees not covered by the subscription or upgrade their subscription. The pay as you go method can be likened to the utility bill. In the pay as you go method, just as in the utility bill, the invoice changes according to the amount of cloud computing services used every month.

There are various advantages of the pay as you go method compared to other cloud computing service contracts.

By paying only for the data used, the pay as you go method saves money. A pre-determined and simple contract provides users with peace of mind. The flexibility and scalability this method provides is adaptable to fluctuations and growth. A non-flexible contract might cause problems if the user’s work plan were to expand, whereas pay as you go method provides users with flexibility.