Recurring Payments with BTCs

[Frozenlock]

I've recently made a website and would really like to accept BTC as payments.

However, I sell a pay-per-month service.
It's relatively easy to do with a credit card, but is there any way to make it with bitcoins?

Is the only alternative making a big yearly payment and sending an invoice to clients each year?

[BCB]

With credit cards the card issuer gives the card holder credit that can be draw down on.  So when a recurring payment hits the authorized card the acquirer receives the funds with that nights batch and the card holder has to pay with in the card terms.  With bitcoin you'd probably have to generate and email your clients a new bitcoin address with each payment in advance of the cut off date then monitor that address for timely payment.

[Kupsi]

Maybe this could be something for Coinbase's merchant tools?

https://coinbase.com/

[Kris]

https://walletbit.com/docs/subscriptions

[giszmo]

There was more discussion about this earlier. Basically if you provide an electronic service you could turn your user to non-premium when he ran out of credit and allow him to pay as many months in advance as he wishes to - granting him discount for more months.

Yes, subscriptions are a nice business model as users are too lazy to cancel them.

[BCB]

Good point. That why gym's and other dues/subscriptions business with mandatory bank or credit card payments are so lucrative.  There model plan for something like 85% of users to only use the facilities 20% of the time, yet the the contracted revenue stream continues.  However with bitcoin you would have to remind the user to pay each month and if they were no longer using the service they just stop paying the monthly fee.

[FreeMoney]

As was mentioned it is hard to get bitcoins from people without their explicit consent. One method might be to say "You have to pay for X months up front, but you can request a pro-rated refund at any time". That might be hard for a customer to swallow depending on the price, but anything else will be a lot less likely to get you your payments. Even if wallets with this feature became popular people would have to keep them funded with sufficient positive balance. Well, unless BTC denominated credit cards proliferate, but that sounds awful and not likely to happen soon imo.

[unclemantis]

I am not sure how this would work. BTC is considered CASH.

[BCB]

Its a peer to peer decentralized crypto currency.  Cash is cash.  You can't send cash instantly around the world over the wire.

[FreeMoney]

I am not sure how this would work. BTC is considered CASH.

A lot of things work with bitcoin that don't work with cash. This appears to be a thing that works with neither, but it's not because they are identical.

[AbsoluteZero]

It is something that could be programed on an online wallet.

To send x number of payments to a particular address every month.

[BCB]

Correct.  But you as the wallet owner control and choose to send those payments each month.  Currently credit card and bank based recurring payments are withdrawn  from your credit/bank account for you.  There is a big difference in terms of bitcoin being a business model and/or a reliable revenue stream for this type of payment.

[justusranvier]

But you as the wallet owner control and choose to send those payments each month.

That does not preclude the existance of wallet software which could optionally send the payments automatically, without requiring user intervention each time.

[FreeMoney]

What are your ideas on currency of denomination? Price in dollars and the user can never be sure they have enough coin to cover up to X time in their recurring-payment-supporting wallet. Price in BTC might be good for you short term, but people will be pissed when they realize their 2BTC monthly payment that just went out is now worth $300 or something.

[BkkCoins]

The only way this could work is to make the auto-sending of a payment as little effort as possible. Such as a pop-up confirmation at the correct time and maybe a list of pending subscriptions you have committed to.

No one should even be using a wallet that has your keys and can actually send for you without password intervention. As that's proven to be very risky.

And a wallet without keys isn't going to be able to send for you anyway.

[jim618]

The only way this could work is to make the auto-sending of a payment as little effort as possible. Such as a pop-up confirmation at the correct time and maybe a list of pending subscriptions you have committed to.

No one should even be using a wallet that has your keys and can actually send for you without password intervention. As that's proven to be very risky.

And a wallet without keys isn't going to be able to send for you anyway.

I think this would be the way to do it.
Perhaps the URI request from the subscription website has details of the recurring details (0.1 BTC by 09:00 UTC on the first Monday of the month for 12 months).
It then appears in your wallet as a repeating payment and there is a list of "Upcoming payments" with the details of your future payments. You could have these sorted by date with the amount so you know what is coming up.

When it becomes due (or nearly due) the wallet software asks you to authorise/ sign it with your password and sends it out to the bitcoin network.

[Topazan]

Repeating payments would be a risky proposition with the bitcoin value as unstable as it is and with bitcoin being irreversible.  You tell your wallet to send a payment of 1 BTC every month, but what it there's a sudden spike or drop in value?  What if the site is hacked and their wallet is hijacked, but you don't get the notice in time?

I think the best solution is simply for bitcoin businesses to use a prepay model.  When I was in China, everything was prepaid.  Cell phone service, apartments, electricity, you name it, and it greatly simplified a lot of things, especially for a non-citizen like me.  When the customer runs out of credit, the service is stopped.  It's a little inconvenient when services were interrupted unexpectedly, but pretty soon you learn not to let your services expire.

[Kris]

Repeating payments would be a risky proposition with the bitcoin value as unstable as it is and with bitcoin being irreversible.  You tell your wallet to send a payment of 1 BTC every month, but what it there's a sudden spike or drop in value?  What if the site is hacked and their wallet is hijacked, but you don't get the notice in time?

I think the best solution is simply for bitcoin businesses to use a prepay model.  When I was in China, everything was prepaid.  Cell phone service, apartments, electricity, you name it, and it greatly simplified a lot of things, especially for a non-citizen like me.  When the customer runs out of credit, the service is stopped.  It's a little inconvenient when services were interrupted unexpectedly, but pretty soon you learn not to let your services expire.

That's why you can check "Adjustable-rate:" ( Adjust amount based on average bitcoin price in USD. ) When using WalletBit for your Subscription needs.

https://walletbit.com/docs/subscriptions

This will make sure you always get the $ value for your product regardless of the fluctuation of BC, based on value at the time the customer subscribed

--
Kris

[BCB]

Two good points I think.

1.  The value would have to be in the local currency so the amount of BTC you are actually paying changes however the actual local fiat value remains relatively stable.
2.  Bitcoin subscriptions would have to be paid for that period in advance.

This type of payment plan is a plus for a consumer as you are only paying for services that you actually used in a given period and a minus for the retailer as you are not guaranteed a steady revenue stream from this type of subscription. 

I'd be curious to know how that affects budgeting/financial planning in China.  If I'm a US cellular carrier or landlord I know i have x number of users paying y amount every z period, accounting for defaults and early termination I can project relatively realistic revenues for a period, (quarter, fiscal year). Maybe its not so different in a prepaid environment but I be curious to hear anyone experience.

If bitcoin it to become more widely used , retailers and merchants have to find greater benefits and cost savings in its use compared to how payments are currently handled and it will obviously have to be better at solving all of those problems. 

[DeathAndTaxes]

It is called prepaid.  

The reality is consumers like it.   In the US the prepaid segment of cellphones is growing 3x as fast as post-paid (recurring bills).  In a couple years the post-paid segment will likely flatline and at some point prepaid will be the majority of plans.  Prepaid cellphone plans now cover everything up to and including the top of the line smartphones and 4G computer/hostspot type devices.  Sure post-paid with overages, hidden charges, unintended payments, etc are GREAT for the merchant but consumers will go where they find the best value.   "Why you no come back?  I want to rape you with hidden fees and unwanted payments" 

http://www.bitmit.net/en/user/TangibleCrypto

As more products become prepaid more consumers will expect/demand it.  There is almost no product/service which can't be prepaid.  Someone will open the first prepaid gym.  It is only a matter of time.  Pay $x for 20 workouts.  The smart merchant analyzes his consumer behavior.  If you know the average consumer quits before using 30 workouts then you can significantly "discount" the units the consumer will never use.

i.e.
$10 for 1 workout
$50 for 20 workouts
$70 for 50 workouts (w/ a BEST VALUE icon)

Change can be scary but if you are offering a clunky recurring billing payment and your competitors are offering a prepaid card you are going to lose.
At best any workaround could be described as clunky.  The fatal flaw will be the lack of universal support.  Are you only going to accept payments from customers using wallets that support it?  Bitcoin market is already small can you afford to make it smaller?

Bitcoin is revolutionary so it requires some out of the box thinking.  There isn't always a direct equivalent but they are alternatives.    One idea I just thought of would be to setup your service/site where when the user logs in it informs him of how many days/units he has left.  Some smart programming could recommend users personalized "one day only sales" to get them to re-up before the last minute.  To continue the gym example, if the user just finished a great workout, that night send him an email offer about discounted price (limited time only of course).