What is Programmable Payments

"Programmable payments are cryptocurrency transactions that execute automatically based on predefined rules, conditions, or schedules encoded in smart contracts eliminating the need for manual payment initiation, intermediary processing, or human approval for routine financial transactions. They represent a quantum leap in payment automation beyond traditional standing orders and direct debit systems.

HOW PROGRAMMABLE PAYMENTS DIFFER FROM TRADITIONAL AUTOMATION

Traditional automated payments (standing orders, direct debits) require: a bank to process the payment, both parties to have bank accounts in the same or compatible banking systems, settlement delays of hours to days, fees extracted by banks and payment processors, and the possibility of payment failure due to bank discretion or error.
Programmable payments via smart contracts: execute on-chain automatically with millisecond precision, settle instantly with finality, cannot be reversed or intercepted by intermediaries, operate 24/7 globally with no banking hours, and work for any two wallet addresses anywhere in the world.

STREAMING PAYMENTS

The most innovative form of programmable payment money that flows continuously like a stream of water rather than in discrete lumps.

Superfluid Protocol: Enables per-second salary streaming. An employee's salary flows continuously into their wallet every second they can withdraw at any moment without waiting for monthly payroll.
Sablier: Vesting streams that release tokens linearly over time to employees, investors, or grant recipients.

ESCROW AUTOMATION

Smart contract escrow releases funds automatically when specified conditions are verified: Freelance contracts release payment when work deliverables are uploaded and confirmed. Real estate deposits release upon title transfer verification. Supply chain payments release upon IoT-confirmed delivery of goods.

RECURRING PAYMENT INFRASTRUCTURE

Superfluid, Sablier, and Request Network enable subscription-style recurring payments. Web3 subscriptions for streaming services, SaaS tools, and content creators can be programmed once and flow automatically.

REAL-WORLD ADOPTION

Payroll in DeFi-native organisations uses streaming payments. DAO contributor compensation increasingly flows via Superfluid. Cross-border B2B payments using stablecoins with smart contract payment terms are growing among crypto-native businesses."

Terms in addition to the Programmable Payments

Blockchain

A blockchain is a subset of a distributed database. The Bitcoin inventors originally prototyped the system in 2008. This modern database is made up of separate blocks that are connected together in a chronological chain. Blockchains may be used to store a wide range of data types. It has mostly been utilized as a public ledger for bitcoin transactions to date. A peer-to-peer network comprised of independent nodes uses a consensus process to ensure the blockchain's security and legitimacy. Each node in the network keeps a public and immutable copy of the data.

2 Factor Authentication (2FA)

2 Factor Authentication is a security measure with two layers. It is used by the majority of cryptocurrency exchanges. To log in, you must provide not only a password, but also a code obtained, for example, from the Google authenticator.

Airdrop

An airdrop is a method of distributing coins. End users can typically obtain coins for free or in exchange for doing a small task, such as subscribing to a newsletter, sending a tweet, or inviting others via a personal affiliate link. Cryptocurrency airdrops — the act of depositing cryptocurrency into public crypto wallets — are utilized as a marketing, liquidity creation, and network bootstrapping technique for many different types of blockchain initiatives.

Altcoin

Altcoin - "alternative coin" - is any kind of digital currency other than Bitcoin. Since the launch of Bitcoin, the world's first digital currency, many altcoins (as well as supporting blockchains) have been created. Altcoin digital currencies share many similarities to Bitcoin, but consistently and have significant differences. There are about 20,000 altcoins, and this number is expected to grow significantly in the coming years. Altcoins often develop Bitcoin features. Ethereum, currently the most widely used blockchain, supports digital contracts and separate applications where Bitcoin does not. Altcoins are also often created to cater to the needs of different users. The Litecoin blockchain, for example, can process payments quarterly for the duration of Bitcoin.

Cold Storage

Cold storage is the way to store cryptocurrency offline. The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.