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Author Topic: Subscription payments with bitcoin?  (Read 1595 times)
giszmo
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June 11, 2012, 02:43:23 AM
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Hi

subscriptions where I pay per month are very common. Is there any wallet that allows me to define subscription payments?

I see no solution so far and several obstacles on the way:
* volatility, so a price agreed on would change every month
* timing, so a client would have to determin a price at the time the payment is due and process it in a timely manner ruling out desktop clients that are offline most of the time
* encrypted wallets would ask its user to confirm each payment

All these issues would be easiest to be solved in a hosted wallet.

I am just implementing subscriptions for my android app and would like to offer bitcoins as a payment option (more to have fun hacking it than to make extra money) but I realized that subscriptions are particularly bad in bitcoin.

Any thoughts on that?

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June 11, 2012, 02:47:05 AM
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I don't know if there is such a thing, but several months ago I thought up a way that it might be done: basically the client in question would have the ability to read or import a vcard style file, which would contain the pay to address and an amount. To deal with fluctuation, it might call home to get that month's amount, or connect with an exchange to check the rate while the amount set in the file was in fiat or something. To prevent accidents, even scheduled payments would require manual authorization as well as the encryption password, but it would be a little more automated because it would pop up a reminder when a payment is due. I never really developed the idea much though.

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DeathAndTaxes
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Gerald Davis


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June 11, 2012, 02:47:33 AM
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You really need to start thinking outside the existing payment models (which exist due to limitations of credit cards).
Any wallet which starts allowing the wallet provide to send money to services (pull vs push) is unlikely to be very popular.

prepaid is likely a better concept then subscription.


i.e. current price is say 1 BTC = x days of service.   Lets say it is 10 days.  I can start using the service as low as 0.1 BTC deposited.  The site converts BTC into days (or hits, or kb, or credits, or whatevers) based on the current rate.  If I login and my service is exhausted I get notified.  If my service is low I get warned. 

giszmo
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June 11, 2012, 04:00:54 AM
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You really need to start thinking outside the existing payment models (which exist due to limitations of credit cards).
Any wallet which starts allowing the wallet provide to send money to services (pull vs push) is unlikely to be very popular.

prepaid is likely a better concept then subscription.


i.e. current price is say 1 BTC = x days of service.   Lets say it is 10 days.  I can start using the service as low as 0.1 BTC deposited.  The site converts BTC into days (or hits, or kb, or credits, or whatevers) based on the current rate.  If I login and my service is exhausted I get notified.  If my service is low I get warned. 

You are totally right. This is what I would want as a customer. As a business man though I want customers that pay monthly even when they only continue to like but not to use my service or when they are just too lazy to cancel the subscription.
I am not suggesting to give control over the amount to the receiver of payment but as a customer I should be able to define recurring payments. As a less evil scenario I want to donate 1$ per month to the Faucet/Wikileaks/… until I change my mind rather than a fixed amount now.

Steve
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June 11, 2012, 01:38:01 PM
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You really need to start thinking outside the existing payment models (which exist due to limitations of credit cards).
Any wallet which starts allowing the wallet provide to send money to services (pull vs push) is unlikely to be very popular.

prepaid is likely a better concept then subscription.


i.e. current price is say 1 BTC = x days of service.   Lets say it is 10 days.  I can start using the service as low as 0.1 BTC deposited.  The site converts BTC into days (or hits, or kb, or credits, or whatevers) based on the current rate.  If I login and my service is exhausted I get notified.  If my service is low I get warned. 
+1  …I think a lot of merchants even in the traditional Visa/MC systems have started to move in this direction.  Subscriptions are a big source of charge backs and can sometimes completely negate any benefits.  Still, there's nothing that says you can't make a wallet that would support a subscription billing model.

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DeathAndTaxes
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Gerald Davis


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June 11, 2012, 01:41:57 PM
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You are totally right. This is what I would want as a customer.

Well you or someone else could create a ewallet which sets up subcription payments so the customer can be fleeced of money they didn't intend to spend on products/services they don't really need/want.

However given the nature of Bitcoin I wouldn't imagine such a wallet wouldn't be very popular.  The user would not have control of private keys (mybitcoin2.0) and like you said as a customer it isn't what you would want.

Your competitors could gain business by giving the customers a prepaid option.  So you are setting yourself up to use a wallet which is likely unpopular, opens the customer to risk, and puts you at a competitive disadvantage to your rivals.

Bitcoin is changing things.  You can embrace the change or you can fight against it and cling to old models.  In the long run the former is going to be more profitable.
mav
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June 11, 2012, 11:10:17 PM
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Bitcoin is changing things.  You can embrace the change or you can fight against it and cling to old models.  In the long run the former is going to be more profitable.


As much as I agree with this statement, I think monthly subscription payments are familiar to the majority of 'normal' customers, and having familiarity is really important for acceptance (of your site/service, not of bitcoin). I wish it wasn't like this but look at how apple has 'such great interface' when really the main thing they've done is make new situations feel familiar. I'm not saying being able to offer monthly subscriptions will be the deal breaker for your service, but every bit of familiarity you can provide makes your customers feel that much more at home using your service. True, prepaid is also familiar, but I think prepaid cannot be directly substituted for monthly payments. It is, however, probably the closest alternative.

This is not to say I think bitcoin should 'natively' support subscription payments. I am currently trying to figure out this same subscription-with-bitcoins thing myself, and have no answer. I will be making my customers make a payment once a month.

I considered the prepaid model as an alternative but it has some drawbacks, especially from the business side of things as already stated.
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