In our case we need the users to pre approve their payments during registration or before doing any business transaction..
once the authorize we need to deduct $X from their account on a monthly basis.. X will vary based on the earnings they have had in the month.. Also for some users we need to payout $Y on a monthly bases.. Y will vary based on their earnings that month...
is adaptive payment the right mode of payments for this?
Yes, that would probably be the best way to go, specifically the Preapproval and Pay APIs.
Alternatively, you could use the Express Checkout APIs with Billing Agreements and Reference Transactions.
I prefer Express Checkout because the experience is just better all around in my opinion.