Addressing Billing Discrepancies in the Crypto Industry
Erez Agmon, CEO of Vayu, highlights a significant yet often overlooked issue within the crypto industry: billing discrepancies that lead to substantial revenue losses for companies expanding their infrastructure. Agmon emphasizes that as cryptocurrency enterprises aim to attract institutional clients, it is not the product itself that falters, but rather the crucial contract-to-cash process, which frequently fails under the strain of complex pricing structures.
The Impact of MiCA Regulations
With the impending MiCA regulations in Europe, which mandate crypto-asset service providers to obtain comprehensive authorizations by July 2026 and maintain chronological records and audit trails, the urgency for precise billing has intensified. Agmon believes that accurate billing is integral to achieving the new operational benchmarks set by these regulations.
Challenges Faced by Early-Stage Crypto Firms
Historically, early-stage crypto firms have relied heavily on engineers to manage billing, where developers create usage metrics, finance teams handle data exports, and invoices are generated manually. This approach functions well until pricing becomes complicated, at which point the manual methods become inefficient. Agmon proposes a shift to a system where billing is managed as a finance-driven workflow instead of an engineering responsibility.
Case Study: Utila’s Transformation
He references Utila, a wallet platform that has secured over $51 million in funding and caters to more than 100 institutional clients. Utila is part of a significant stablecoin infrastructure initiative, processing transactions that exceed $15 billion monthly. This high volume inherently unveils any discrepancies between sales and invoicing. Previously, Utila’s reliance on engineering for its pricing and product launches led to operational bottlenecks; however, a collaboration with Vayu has transformed this landscape. Inbal Rosen, Utila’s head of business operations, remarked that Vayu’s support has provided critical insights and real-time revenue data, enhancing their strategic decision-making capabilities.
Revenue Leakage and Compliance Trends
Agmon identifies underbilled or unbilled usage as a particularly underappreciated source of revenue leakage, with many crypto firms pricing their services based on various activities like transactions, API calls, and verification events. Without automated billing protocols linked to these activities, revenue can easily slip through the cracks, resulting in disputes over invoices that do not reflect a customer’s actual use.
He connects this billing challenge to a larger trend towards compliance, indicating that the ability to trace financial flows is becoming increasingly crucial. The gap between signed contracts, pricing terms, actual usage, and invoiced amounts exposes vulnerabilities that companies cannot afford to overlook, especially in light of tightening regulations.
Proposed Solutions for Improved Billing
To address these challenges, Agmon suggests a hybrid billing model that combines a fixed base fee with variable usage-based pricing, all managed directly by the finance team. This model is particularly important as firms approach the MiCA deadline, needing to validate every aspect of their transactions from what was sold through to what was billed.
Conclusion: The Need for Modernization
Founded in 2023 and supported by $7 million in seed funding, Vayu serves various clients such as Au10tix, Mesh Payments, and Utila, with Agmon asserting the need for cryptocurrency businesses to modernize their billing processes. As scrutiny from regulators and the push for institutional diligence increase, improving the links between sales and invoicing has become a crucial priority for the industry.
