How to handle recurring payment chargeback?

[BoganPetrov]

Hello I am CTO of Flote App working to make recurring bitcoin payment to content creators but have trouble understanding how to handle chargeback. Must we maintain bitcoin of user in escrow account because I find that there is no way to reverse transaction with blockchain technology. Is this correct?

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[1714771538]

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[LoyceV]

I find that there is no way to reverse transaction with blockchain technology. Is this correct?

Correct. The only way to return a payment, is by making a new transaction. If you, as a payment processor, want to be able to handle chargebacks, you'll have to hold on to the coins until chargebacks are no longer allowed.
This also means the same coins have to be send twice, effectively doubling the transaction fees.

[BoganPetrov]

Thank you for the reply. I suppose we will hold funds and do payment once a month. I am not certain I like the risk of holding customer funds. I will need to discuss with our team.

[Jet Cash]

Correct. The only way to return a payment, is by making a new transaction. If you, as a payment processor, want to be able to handle chargebacks, you'll have to hold on to the coins until chargebacks are no longer allowed.

Would it not be easier just to say that chargebacks are not possible, but the organisation will honour a valid claim by making a refund. Surely, the customer doesn't need to have the same coins returned, all he needs is to receive the equivalent in coins.

[Harlot]

Thank you for the reply. I suppose we will hold funds and do payment once a month. I am not certain I like the risk of holding customer funds. I will need to discuss with our team.

Maybe it would help if you stored all the funds of your customers to a offline storage. If you aren't rushing the payments like instantly after the service just like what you said that payments will be sent once a month then this system will help you. Offline wallets would really help you as a lot of businesses have been fucked up a lot from hacks by keeping their crypto on a online or even a 3rd party wallet.