Transaction-based pricing charges according to the number or type of completed units of work. It is common in outsourcing, payments, document processing and operational services.
What counts as a transaction?
The contract must define the billable unit, such as an invoice processed, call handled, claim completed or payment sent. It should address duplicates, rejected items and rework.
How is the monthly charge calculated?
Assume 18,000 standard transactions at $0.80 and 2,000 complex transactions at $2.50. The illustrative charge is 18,000 × $0.80 + 2,000 × $2.50 = $19,400.
Illustrative transaction-based charge
| Transaction type | Volume and rate | Charge |
|---|---|---|
| Standard | 18,000 × $0.80 | $14,400 |
| Complex | 2,000 × $2.50 | $5,000 |
| Illustrative total | 20,000 transactions | $19,400 |
The example excludes minimums, setup, taxes, credits and volume-tier changes.
Transaction pricing vs. FTE pricing
Transaction pricing transfers more volume and productivity risk to the provider. FTE pricing charges for staffed capacity. Data quality and unit definition are critical for transaction pricing.
What should the contract define?
Specify source system, cut-off, transaction status, complexity tiers, exceptions, minimums, audit rights and service levels. Reconcile billed counts to operational records.
