diff --git a/contracts/vault/src/lib.rs b/contracts/vault/src/lib.rs
index f49ca7e..3d82f10 100644
--- a/contracts/vault/src/lib.rs
+++ b/contracts/vault/src/lib.rs
@@ -17,6 +17,7 @@ use soroban_sdk::{contract, contractimpl, contracttype, Address, Env, Symbol, Ve
 pub struct VaultMeta {
     pub owner: Address,
     pub balance: i128,
+    pub authorized_caller: Option<Address>,
     /// Minimum amount required per deposit; deposits below this panic.
     pub min_deposit: i128,
 }
@@ -62,6 +63,12 @@ impl CalloraVault {
     /// Initialize vault for an owner with optional initial balance and minimum deposit.
     /// If initial_balance > 0, the contract must already hold at least that much USDC (e.g. deployer transferred in first).
     /// Emits an "init" event with the owner address and initial balance.
+    pub fn init(
+        env: Env,
+        owner: Address,
+        initial_balance: Option<i128>,
+        authorized_caller: Option<Address>,
+    ) -> VaultMeta {
     ///
     /// # Arguments
     /// * `revenue_pool` – Optional address to receive USDC on each deduct (e.g. settlement contract). If None, USDC stays in vault.
@@ -105,6 +112,7 @@ impl CalloraVault {
         let meta = VaultMeta {
             owner: owner.clone(),
             balance,
+            authorized_caller,
             min_deposit: min_deposit_val,
         };
         // Persist metadata under both the literal key and the constant for safety.
@@ -225,6 +233,25 @@ impl CalloraVault {
             .unwrap_or_else(|| panic!("vault not initialized"))
     }
 
+    /// Set or update the authorized caller for deduction. Only callable by the vault owner.
+    pub fn set_authorized_caller(env: Env, caller: Address) {
+        let mut meta = Self::get_meta(env.clone());
+        meta.owner.require_auth();
+
+        meta.authorized_caller = Some(caller.clone());
+        env.storage()
+            .instance()
+            .set(&Symbol::new(&env, "meta"), &meta);
+
+        env.events().publish(
+            (Symbol::new(&env, "set_auth_caller"), meta.owner.clone()),
+            caller,
+        );
+    }
+
+    /// Deposit increases balance. Callable by owner or designated depositor.
+    /// Emits a "deposit" event with amount and new balance.
+    pub fn deposit(env: Env, amount: i128) -> i128 {
     /// Deposit: user transfers USDC to the contract; contract increases internal balance.
     /// Caller must have authorized the transfer (token transfer_from). Supports multiple depositors.
     /// Emits a "deposit" event with the depositor address and amount.
@@ -262,6 +289,9 @@ impl CalloraVault {
         meta.balance
     }
 
+    /// Deduct balance for an API call. Only authorized caller or owner.
+    /// Emits a "deduct" event with amount and new balance.
+    pub fn deduct(env: Env, caller: Address, amount: i128) -> i128 {
     /// Deduct balance for an API call. Callable by authorized caller (e.g. backend).
     /// Amount must not exceed max single deduct (see init / get_max_deduct).
     /// If revenue pool is set, USDC is transferred to it; otherwise it remains in the vault.
@@ -301,6 +331,17 @@ impl CalloraVault {
         assert!(!Self::paused(env.clone()), "vault is paused");
 
         let mut meta = Self::get_meta(env.clone());
+
+        // Ensure the caller corresponds to the address signing the transaction.
+        caller.require_auth();
+
+        // Check authorization: must be either the authorized_caller if set, or the owner.
+        let authorized = match &meta.authorized_caller {
+            Some(auth_caller) => caller == *auth_caller || caller == meta.owner,
+            None => caller == meta.owner,
+        };
+        assert!(authorized, "unauthorized caller");
+
         assert!(meta.balance >= amount, "insufficient balance");
 
         meta.balance -= amount;
@@ -320,6 +361,9 @@ impl CalloraVault {
     }
 
     /// Batch deduct: multiple (amount, optional request_id) in one transaction.
+    /// Reverts the entire batch if any single deduct would exceed balance.
+    /// Emits one "deduct" event per item (same shape as single deduct).
+    pub fn batch_deduct(env: Env, caller: Address, items: Vec<DeductItem>) -> i128 {
     /// Each amount must not exceed max_deduct. Reverts entire batch if any check fails.
     /// If revenue pool is set, total deducted USDC is transferred to it once.
     /// Emits one "deduct" event per item.
@@ -327,6 +371,17 @@ impl CalloraVault {
         caller.require_auth();
         let max_deduct = Self::get_max_deduct(env.clone());
         let mut meta = Self::get_meta(env.clone());
+
+        // Ensure the caller corresponds to the address signing the transaction.
+        caller.require_auth();
+
+        // Check authorization: must be either the authorized_caller if set, or the owner.
+        let authorized = match &meta.authorized_caller {
+            Some(auth_caller) => caller == *auth_caller || caller == meta.owner,
+            None => caller == meta.owner,
+        };
+        assert!(authorized, "unauthorized caller");
+
         let n = items.len();
         assert!(n > 0, "batch_deduct requires at least one item");
 
diff --git a/contracts/vault/src/test.rs b/contracts/vault/src/test.rs
index b445bc8..4c339fa 100644
--- a/contracts/vault/src/test.rs
+++ b/contracts/vault/src/test.rs
@@ -111,6 +111,7 @@ fn init_with_balance_emits_event() {
     env.mock_all_auths();
     // Call init directly inside as_contract so events are captured
     let events = env.as_contract(&contract_id, || {
+        CalloraVault::init(env.clone(), owner.clone(), Some(1000), None);
         CalloraVault::init(
             env.clone(),
             owner.clone(),
@@ -161,6 +162,11 @@ fn get_meta_returns_owner_and_balance() {
     let client = CalloraVaultClient::new(&env, &contract_id);
     let (usdc_token, _, usdc_admin) = create_usdc(&env, &owner);
 
+    client.init(&owner, &Some(100), &None);
+    client.deposit(&200);
+    assert_eq!(client.balance(), 300);
+    env.mock_all_auths();
+    client.deduct(&owner, &50);
     env.mock_all_auths();
     client.init(&owner, &Some(100));
 
@@ -374,6 +380,10 @@ fn batch_deduct_events_contain_request_ids() {
     let rid_a = Symbol::new(&env, "batch_a");
     let rid_b = Symbol::new(&env, "batch_b");
 
+    client.init(&owner, &Some(1000), &None);
+    let req1 = Symbol::new(&env, "req1");
+    let req2 = Symbol::new(&env, "req2");
+    let items = vec![
     let items = soroban_sdk::vec![
         &env,
         DeductItem {
@@ -385,6 +395,10 @@ fn batch_deduct_events_contain_request_ids() {
             request_id: Some(rid_b.clone()),
         },
     ];
+    env.mock_all_auths();
+    let new_balance = client.batch_deduct(&owner, &items);
+    assert_eq!(new_balance, 650);
+    assert_eq!(client.balance(), 650);
     client.batch_deduct(&caller, &items);
 
     let all_events = env.events().all();
@@ -412,6 +426,20 @@ fn get_admin_returns_correct_address() {
     let client = CalloraVaultClient::new(&env, &contract_id);
     let (usdc_token, _, usdc_admin) = create_usdc(&env, &owner);
 
+    client.init(&owner, &Some(100), &None);
+    let items = vec![
+        &env,
+        DeductItem {
+            amount: 60,
+            request_id: None,
+        },
+        DeductItem {
+            amount: 60,
+            request_id: None,
+        }, // total 120 > 100
+    ];
+    env.mock_all_auths();
+    client.batch_deduct(&owner, &items);
     env.mock_all_auths();
     fund_vault(&usdc_admin, &contract_id, 100);
     client.init(&owner, &usdc_token, &Some(100), &None, &None, &None);
@@ -430,6 +458,7 @@ fn set_admin_updates_admin() {
     let (usdc_token, _, usdc_admin) = create_usdc(&env, &owner);
     client.init(&owner, &Some(100));
 
+    client.init(&owner, &Some(500), &None);
     env.mock_all_auths();
     fund_vault(&usdc_admin, &contract_id, 100);
     client.init(&owner, &usdc_token, &Some(100), &None, &None, &None);
@@ -519,6 +548,7 @@ fn distribute_insufficient_usdc_fails() {
     );
 }
 
+    client.init(&owner, &Some(100), &None);
 #[test]
 fn distribute_zero_amount_fails() {
     let env = Env::default();
@@ -548,6 +578,7 @@ fn set_and_retrieve_metadata() {
     let contract_id = env.register(CalloraVault {}, ());
     let client = CalloraVaultClient::new(&env, &contract_id);
 
+    client.init(&owner, &Some(50), &None);
     client.init(&owner, &Some(100));
 
     env.mock_all_auths();
@@ -623,6 +654,7 @@ fn update_metadata_and_verify() {
     let contract_id = env.register(CalloraVault {}, ());
     let client = CalloraVaultClient::new(&env, &contract_id);
 
+    client.init(&owner, &Some(500), &None);
     client.init(&owner, &Some(100));
 
     env.mock_all_auths();
@@ -1837,7 +1869,92 @@ fn init_unauthorized_owner_panics() {
     let contract_id = env.register(CalloraVault {}, ());
     let client = CalloraVaultClient::new(&env, &contract_id);
 
+    client.init(&owner, &Some(100), &None);
+    client.withdraw(&50);
     // Call init without mocking authorization for `owner`.
     // It should panic at `owner.require_auth()`, preventing unauthorized or zero-address initialization.
     client.init(&owner, &Some(100));
 }
+
+#[test]
+fn authorized_caller_deduct_success() {
+    let env = Env::default();
+    let owner = Address::generate(&env);
+    let authorized = Address::generate(&env);
+    let contract_id = env.register(CalloraVault {}, ());
+    let client = CalloraVaultClient::new(&env, &contract_id);
+
+    client.init(&owner, &Some(1000), &Some(authorized.clone()));
+
+    // Auth as authorized caller
+    env.mock_auths(&[soroban_sdk::testutils::MockAuth {
+        address: &authorized,
+        invoke: &soroban_sdk::testutils::MockAuthInvoke {
+            contract: &contract_id,
+            fn_name: "deduct",
+            args: (authorized.clone(), 100i128).into_val(&env),
+            sub_invokes: &[],
+        },
+    }]);
+
+    client.deduct(&authorized, &100);
+    assert_eq!(client.balance(), 900);
+}
+
+#[test]
+fn owner_can_always_deduct() {
+    let env = Env::default();
+    let owner = Address::generate(&env);
+    let authorized = Address::generate(&env);
+    let contract_id = env.register(CalloraVault {}, ());
+    let client = CalloraVaultClient::new(&env, &contract_id);
+
+    client.init(&owner, &Some(1000), &Some(authorized));
+
+    env.mock_all_auths();
+    client.deduct(&owner, &100);
+    assert_eq!(client.balance(), 900);
+}
+
+#[test]
+#[should_panic]
+fn unauthorized_caller_deduct_fails() {
+    let env = Env::default();
+    let owner = Address::generate(&env);
+    let authorized = Address::generate(&env);
+    let attacker = Address::generate(&env);
+    let contract_id = env.register(CalloraVault {}, ());
+    let client = CalloraVaultClient::new(&env, &contract_id);
+
+    client.init(&owner, &Some(1000), &Some(authorized));
+
+    // Auth as attacker
+    env.mock_auths(&[soroban_sdk::testutils::MockAuth {
+        address: &attacker,
+        invoke: &soroban_sdk::testutils::MockAuthInvoke {
+            contract: &contract_id,
+            fn_name: "deduct",
+            args: (attacker.clone(), 100i128).into_val(&env),
+            sub_invokes: &[],
+        },
+    }]);
+
+    client.deduct(&attacker, &100);
+}
+
+#[test]
+fn set_authorized_caller_owner_only() {
+    let env = Env::default();
+    let owner = Address::generate(&env);
+    let new_auth = Address::generate(&env);
+    let contract_id = env.register(CalloraVault {}, ());
+    let client = CalloraVaultClient::new(&env, &contract_id);
+
+    client.init(&owner, &Some(1000), &None);
+
+    env.mock_all_auths();
+    client.set_authorized_caller(&new_auth);
+
+    let meta = client.get_meta();
+    assert_eq!(meta.authorized_caller, Some(new_auth));
+}