Why usage based pricing is quietly rewriting how we pay
Yesterday’s Budget confirmed what many people in payments have expected for a while. From 2028, electric and plug in hybrid vehicles in the UK will move onto a national pay per mile model, with EV drivers charged a few pence for every mile they travel to replace lost fuel duty revenue. The Office for Budget Responsibility expects this new mileage charge to raise around £1.4 billion a year once fully in place.
It is a big policy shift. For decades, road tax has been tied to petrol and diesel at the pump. Now road use itself becomes the taxable event, measured and priced at transaction level.
For Raimac, a programmable payments company that exists to make payments more flexible and logic based, this is more than a tax story. It is a very visible example of a wider pattern. Governments, insurers, utilities and software platforms are all nudging towards pricing that reflects how people actually use things, not just that they own them.
Below are four areas where pay per use or usage based pricing is already becoming normal in practice. Each one creates both opportunity and risk.
Pay per mile for electric vehicles
The UK’s new EV levy is simple in concept. From 2028, electric cars will pay a mileage based road tax, currently briefed at around 3p per mile for pure EVs and 1.5p for plug in hybrids, in order to compensate for the loss of fuel duty as petrol and diesel cars are phased out.
The logic is clear.
- As EV adoption grows, fuel duty receipts shrink.
- The government still needs a way to fund roads and transport.
- Taxing distance travelled is, on paper, more closely linked to actual road use than a flat annual fee.
Pros
- Links what you pay to how much you actually drive, which many people would see as fairer than a blanket fee.
- Preserves the long term tax base as fossil fuel use declines.
- Can, in theory, be tuned over time by vehicle type, location or emission profile.
Cons and open questions
- Risk that it slows EV adoption if drivers feel they are being punished for switching early.
- Potential privacy concerns if distance is monitored through connected vehicles or telematics rather than simple odometer readings.
- Rural and lower income drivers may feel they have fewer alternatives and less ability to avoid mileage.
From Raimac’s point of view, what matters is the pattern. Road charging is moving away from a blunt, one size fits all approach and towards something more dynamic and data driven, where the “event” of a mile travelled becomes a chargeable trigger.
That is exactly how programmable payments think about the world, a series of definable events that can trigger payments using simple logic.
Usage based and pay per mile insurance
Motor insurance is going through a similar shift, although driven by the private sector rather than tax policy.
Usage based insurance, sometimes called telematics, pay as you drive or pay per mile, prices cover based on how and how much a vehicle is driven. This can include mileage, time of day, speed, braking patterns and more, typically collected through a black box, mobile app or connected car data. UK comparison sites now show dedicated pay as you go products, including pay per day or per hour cover and mileage based policies.
Globally, the market is scaling fast. One recent analysis estimates the usage based insurance market is worth around 30 billion US dollars in 2025 and could double by 2030 as insurers move from static tables to real time behavioural data.
Again, the pattern is that the payment becomes conditional. The premium a customer pays is no longer just “£X per year” but “£X, unless you drive more, at different times, or in different ways, in which case the logic changes the price”.
That is a programmable payment in all but name.
Time of use and smart tariffs in energy
Energy has been moving towards usage sensitive pricing for decades, but smart meters and digital tariffs are making it much more explicit.
Traditional Economy 7 style tariffs already give households a cheaper night rate and a higher day rate, usually with around seven hours of cheaper electricity overnight.
More recently, suppliers like E.ON Next have launched “time of use” smart tariffs with several different rates across the day, for example super off peak pricing in the early hours, a standard daytime rate, and a more expensive peak rate in the early evening. The aim is to reward people who can shift usage away from peak times and, in theory, to help balance the grid.
From a payments design perspective, energy is moving from “you pay a fixed unit rate at all times” to “you pay different rates for the same kilowatt hour depending on when you use it”. The unit of consumption has not changed, but the logic wrapped around it has.
This is exactly the kind of rule based environment where a programmable payments layer can automate decisions, for example pausing non essential usage or smoothing payments for households that struggle with volatile bills.
Usage based billing in software and infrastructure
The subscription economy is now well established, but underneath it a quieter shift is underway. Many software and infrastructure providers are moving to usage based or consumption billing, where customers are charged for actual use, not just for holding a licence.
Common examples include:
- Cloud platforms that charge per API call, gigabyte stored or compute hour.
- Communications APIs that bill per message or per minute of call time.
- Data and analytics platforms that charge per query or credit consumed.
What is interesting here is the granularity. The “event” that triggers a payment can be very small, for example one API call, yet still needs robust logic, audit trails and a clear link back to value.
That is a natural fit for programmable payments and contextual payments, where an instruction such as “pay £0.0001 every time this device calls this service” is handled in the background by a logic engine. Recent work from the US Payments Forum describes how AI, 5G and IoT are combining to enable exactly this kind of contextual, event based transaction across mobility, smart homes, retail and more.
What this tells us about the direction of travel
You could look at each of these trends in isolation. EV road pricing is about tax. Usage based insurance is about risk. Smart tariffs are about energy security. SaaS billing is about recurring revenue.
However, taken together they point to a broader shift in how money moves.
- From ownership to usage
The fact that you own a car, a boiler or a software licence matters less. What matters is how, when and how much you use it. - From static terms to dynamic rules
Flat fees and rigid schedules are being replaced by logic. “Pay this much, at this time, if and only if these conditions are met” is becoming normal. - From manual control to automated flows
Increasingly, the complexity of deciding when and how to pay is being pushed into the background, handled by software, data and event triggers, not by people remembering to move money.
That is the world Raimac was built for.
Raimac sits as a programmable payments layer over cards and open banking. We let businesses define simple rules about when, how often and under what conditions money moves, particularly where affordability and fairness matter, for example in debt recovery or repayment plans.
Instead of blunt tools like debt collection agencies or static direct debits, a council, utility or platform can offer a pay by link plan that says:
- “Take an initial payment today, then collect instalments on payday for six months, unless a payment fails, in which case pause and notify the customer rather than escalate immediately.”
That is usage based thinking applied to repayment rather than to the underlying service. It is small, human scale, but sits in the same family as EV pay per mile or time of use energy.
How Raimac can help
Raimac does not set tax policy or design energy tariffs. What we can do is help partners in those systems build repayment and revenue models that are:
- Logic based: Clear rules for when to collect, when to pause and when to escalate.
- Fairness first: Aligned to affordability and regulatory duty, not just short term recovery.
- Infrastructure light: Built on top of existing card and open banking rails rather than requiring a new app, wallet or rail.
There is one more point that matters for our own roadmap. As programmable payments become more common, the data surrounding those transactions becomes both richer and more commercially valuable. A platform that handles high volumes of event driven payments sees patterns that individual businesses cannot easily see on their own, how people actually repay, when they prefer to pay, which plan lengths work and which ones fail, where friction arises and what behaviours predict better outcomes.
Over time, Raimac becomes more than a payments engine. It becomes a source of pricing and behavioural insight. A partner that can tell a council how citizens respond to different repayment schedules, or an energy provider which triggers improve recovery without harming affordability. That intelligence makes the platform inherently sticky. Once you rely on data driven guidance for how, when and where to price or recover, switching away becomes far less attractive. That is where much of the long term value sits, a growing intelligence layer built on real transactional behaviour, not theory.
If you are a PSP, a utility, a local authority or a platform that wants to explore usage based, pay per use or event triggered payments without adding more credit risk, that is exactly what we are here to do.
