Author: Kevin Greene 2014-02-12 06:32:18
Published on: 2014-02-12T06:32:18+00:00
A protocol has been proposed to enable recurring payments in Bitcoin through an extension of BIP-0070. The primary objective is for the customer to subscribe to a service and have the wallet automatically make recurring payments without any intervention, as long as the payments match the subscription contract. This model presents new advantages over traditional payment methods in terms of user control and subscription management tools in wallets. Subscription-based services have been growing, and this protocol caters to this need.The entire process involves initial registration, ongoing payments, subscription change, and cancellation of subscription. During initial registration, the customer selects a subscription and authorizes payment. The wallet sends confirmation to the merchant, who approves the subscription. In ongoing payments, the wallet is responsible for polling the merchant for due payments associated with the subscription. The wallet needs to get the latest invoice balance to ensure how much it should pay. In case of overage charges, the wallet supports them.On the merchant side, an entitlement system grants the user access to certain resources depending on the account status. A dunning system progressively restricts access if the user's account is more overdue. The customer ensures that the wallet is up often enough for payments to happen since wallets can be offline for an extended period. During the subscription change, the customer clicks 'upgrade,' 'downgrade,' and the merchant sends back a message to the wallet with the detail of the new subscription. The wallet prompts the customer for authorization, sends confirmation to the merchant, and confirms the change in subscription. In the cancellation of subscription, the customer initiates the cancellation, and the wallet informs the merchant about it. Finally, the merchant confirms the cancellation of the subscription.Though the protocol is still being refined, feedback on the high-level proposal is welcome. Overall, this protocol introduces an efficient way of managing subscriptions using Bitcoin, and it will be useful for both merchants and customers.
Updated on: 2023-06-08T01:51:47.557466+00:00