Pay as you Go scales until there is enough loyalty and demand that your users opt for a monthly fee to save money. By forcing everyone to a monthly fee you alienate a ton of users that want to use your service but not enough to need a subscription.
I hope you are being sarcastic. I’ll give two examples: about twice a year I need to (a) send something for signature digitally or (b) send something digitally to a fax number. If I can pay $2-10 for this, I will in a heartbeat and move forward. But it seems every provider wants me to sign up for a monthly plan as if these irregular needs will magically become regular. So instead I waste a ton of time driving to the library to use their fax machine or mailing a paper copy of my signature to someone. I would rather pay a premium to use something every now and then, but I won’t agree to subscribe. If these ever became more than irregular needs I would gladly subscribe to get a lower price per use.
I bet there are orders of magnitude more users like me, the sum of which would be a sizeable market. But instead every SAAS provider is focused only on regular monthly users, ignoring this shadow market. But it is a false dichotomy. Make it highly profitable but not scalable to do Pay as you Go, and then less profitable but scalable to go monthly. Do both.
They need to charge enough per unit of service to make it worthwhile. And people need to understand that they need to pay for services. Not everything is free.
Subscriptions are a good model for things that you use often and regularly. PAYG is better for things that have high value when you need them, but you don't need often.
I can see services like this offering both, and customers choosing one or the other based on their usage pattern.
You see this with movies already, and I think it works well: You can subscribe to the monthly and watch whatever, whenever. Or just rent movies when you occasionally want to watch one. Both are cool.