Dynamic Pricing for SaaS: The 2025 Growth Strategy

In today's fast-paced SaaS market, dynamic pricing is not simply a choice; it is a requirement.

To remain competitive, SaaS companies must tailor their pricing strategies and automate their global scaling processes. What's the key? Working with a Merchant of Record (MoR) to oversee everything. 

What is Dynamic Pricing in SaaS?

Dynamic pricing enables SaaS companies to adjust prices in real-time based on various data signals: user location, license type, usage behavior, business segment, and more. This model supports several popular strategies:

Why is dynamic pricing hard to implement?

Manually managing dynamic pricing across global markets is time-consuming and error-prone. Factors like currency conversion, tax global compliance, upgrade logic, and licensing add layers of complexity that many internal systems can’t handle effectively.

7 Benefits of Dynamic Pricing 

Dynamic pricing presents itself as a real opportunity for SaaS business. This SaaS pricing model brings forward several real advantages 

1. Increase Recurring Revenue 

Through dynamic pricing, SaaS organizations can implement product prices that reflect user demand, customer audiences, usage patterns, and market realities. This means that SaaS businesses, employing this pricing strategy, can leverage an adjusted pricing instead of the one-size-fits-all version. 

2. Improved Customer Segmentation

Users are different, and pricing must reflect that. Dynamic pricing is a strategy that allows tailoring based on customer audiences - enterprise, SMBs, start-ups, or individuals.

3. Responds to Market Changes

Markets are shifting rapidly. Dynamic pricing allows SaaS businesses to keep up with change and market trends. This SaaS pricing strategy is an alternative to static updated models, being suitable especially for recurring revenue.

4. Supports Usage-Based Models

Many SaaS platforms now use usage-based or hybrid pricing. Dynamic pricing aligns well with this, charging based on features used, number of users, or API calls, creating a fairer and more scalable pricing strategy.

5. Encourages Upselling and Retention

With dynamic pricing, companies can offer personalized upgrade offers or volume discounts at the right time, improving upselling success and customer lifetime value.

6. Enables A/B Testing and Optimization

It allows businesses to experiment with different price points across user segments, measure results, and refine pricing strategies based on data—not guesswork.

7. Improves Competitive Positioning

SaaS is a crowded space. Dynamic pricing helps companies stay competitive by adjusting to competitor pricing or offering limited-time promotions strategically.

Why You Need a Merchant of Record (MoR) to Make It Work

A Merchant of Record is a service provider who manages the legal and financial duties of selling digital things, including:

How does MoR simplify dynamic pricing?

MoRs like PayPro Global enable you to create flexible pricing rules that dynamically modify based on:

• Region-specific purchasing power and user segments/license kinds.
• Product bundles or after-sales services.
• Real-time A/B testing for pricing optimization
• Third-party integrations and numerous pricing systems are no longer necessary as a result.

Real-World Example: Actifile and PayPro Global

What was the challenge?

To Actifile, worldwide growth entails more than just local payment options and currencies. Expanding abroad requires access to a strong and innovative payment infrastructure that provides flexibility, transparency, and dedicated service.

With clients all over the world and ambitions to create new norms in the data security landscape, Actifile required a partner that could eliminate all of the difficulties associated with global payments. 

What was the solution?

Actfile found all that and more in PayPro Global’s unique Merchant of Record model: 

Result: 

Benefits of Merchant of Record for Dynamic Pricing 

Dynamic pricing with MoRs can enhance revenue recognition.

• Indeed. When used in conjunction with a MoR, dynamic pricing ensures appropriate revenue recognition across currencies and billing periods by conforming to standards such as IFRS and ASC 606.
  

   

Dynamic Pricing & MoRs can impact ongoing billing

• The MoR's integrated subscription management system automates recurring revenue in the sense of customer upgrades, pricing changes, and renewals. This lowers churn brought on by billing friction and guarantees consistency.

MoR can simplify global compliance with region-specific regulartions.

• MoRs eliminate the legal risks associated with inaccurate invoicing or improperly applied VAT/GST by ensuring your SaaS company conforms with tax rules in more than 200 nations.

  Choosing the Right SaaS Pricing Strategy

Pro Tip: