Crypto subscriptions and recurring billing
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
Recurring billing in crypto cannot simply copy the card model where the merchant pulls a payment each month. Either the user sends each payment manually, or they grant the merchant a standing permission to pull funds. The second is convenient but, if the allowance is scoped wrongly, becomes a route for draining a wallet.
Key points
- There is no built-in way for a merchant to pull funds automatically
- Either the user pays each cycle, or grants a standing allowance
- A badly scoped allowance becomes a wallet-draining route
- Cancelling is only complete once the allowance is revoked
Definition
Arrangements for recurring monthly or annual payments in crypto, implemented as manual transfers, pre-approved pulls, or continuous streaming.
On a blockchain, transfers are initiated by the sender. The card model, where the merchant pulls each month, therefore has no direct equivalent. The simplest alternative is for the user to send each payment — which invites lapses through forgetfulness.
To avoid that, services use token approvals to let their contract pull funds. The critical detail is to approve only the amount actually needed. An unlimited approval leaves the whole balance reachable if the contract is buggy or the operator turns hostile.
Cancellation also works differently. Clicking 'cancel' on the service's dashboard does not remove the approval sitting in your wallet. Exposure ends only once you revoke it yourself. Many services never mention this step, so it is on the user to check.
Watch out for
- · Never grant unlimited approvals; scope them to the amount and period needed
- · After cancelling, revoke the approval and confirm nothing remains
- · Use a separate wallet for subscriptions and keep only what is needed in it