You can open registrations from
WP Admin -> s2member -> General Options -> Open Registration / Free Subscribers.
s2Member supports Free Subscribers ( at Level #0 ), along with four Primary Levels [1-4] of paid Membership. If you want your visitors to be capable of registering absolutely free, you will want to "allow" Open Registration. Whenever a visitor registers without paying, they'll automatically become a Free Subscriber, at Level #0.
To charge them later, you'd create a modification button to upgrade them to a higher level, e.g. Level 1. Go to
WP Admin -> s2member -> General Options -> PayPal Buttons -> PayPal Subscr Modification Buttons.
*Also Works For Free Subscribers* Although a Free Subscriber does not have an existing PayPal® Subscription, s2Member is capable of adapting to this scenario gracefully. Just make sure that your existing Free Subscribers ( the ones who wish to upgrade ) pay for their Membership through a Modification Button generated by s2Member. That will allow them to continue using their existing account with you. In other words, they can keep their existing Username ( and anything already associated with that Username ), rather than being forced to re-register after checkout.
In order to notify them, you could email them a link to a page where you explain what they'll get with a paid membership and provide the modification button there. If you integrated s2Member with a List Server, you would email them from that service, otherwise get a plugin that allows you to email your members easily. Or you could just start protecting your content at Level 1 and your Level 0 members will be sent to the Membership Options Page where you can show them the modification button.
I hope this helps you.