You only pay the copay after you've been chosen to be upgraded. In my experience it's one of the more frustrating processes because often upgrades clear these days only during boarding and they can't confirm you into the new seat until they've processed your payment, which requires the gate agent calling someone and waiting on-hold while boarding the plane. This takes so long that I end up boarding after everyone else, just before the doors close. If by chance they can't process payment, my original seat is gone, so I guess I just end up in a bad middle seat or on the next flight? Fortunately that hasn't happened, but it consistently makes this one of the most stressful situations.