In 2023, 41% of SaaS companies have adopted usage-based pricing models, with hybrid approaches combining usage and subscription components becoming prevalent. This trend leverages psychological principles to enhance customer adoption and revenue growth by making consumption-driven pricing feel fair and intuitive. Key strategies include price anchoring, which establishes a mental benchmark through initial consumption tiers, and the decoy effect, which positions certain pricing tiers to make others appear more valuable, guiding customers toward premium options. Usage-based pricing poses challenges such as cost unpredictability, addressed through strategies like consumption forecasting tools, real-time dashboards, and transparent billing practices. With the rise of AI, usage-based pricing has also permeated the application layer, necessitating clear communication of value metrics to align costs with outcomes. Lago's metering and billing platform supports these sophisticated pricing strategies by providing real-time consumption visibility, flexible tier configurations, and transparent billing, ultimately enhancing customer trust and satisfaction.