Subscription Payments in Bitcoin: How to Set Up Recurring Bitcoin Payments
Subscription billing is an old billing model that people have been using for decades. However, automation proved to be the wings for the subscription billing model that took it to the next level. Today, it has become so popular that many businesses that one cannot even consider are shifting to subscriptions and looking for subscription management software.
Digital currencies are also changing the norms of billing and payment. There are many digital currencies that people use worldwide. Governments are involved in setting rules for the usage of digital currencies. For example, Bitcoin is one of the digital currencies that frees you from the liabilities of any central organization, e.g., banks.
Subscription billing as a business model and bitcoin as a digital currency has become the point of interest for the digital business community. It is for sure that the amalgam of these two can amaze the online business community. That's why many recurring billing platforms are now looking forward to opting for the bitcoin payment method.
There are the following reasons that businesses actively seek ways to introduce bitcoin as a payment method for subscribers:
- Peer to peer payment system
- No banking fees
- No intermediary body, e.g., banks
- Secure payment method
Many people question the security of online payments in bitcoin. You must know that offering bitcoin as a payment method can help you bring more subscribers. It is secure to pay a subscription fee with bitcoin because the subscribers would not need to share the sensitive information they otherwise need (when they pay by using bank cards).
Push Payments Vs. Pull Payments
When an invoice is generated at the merchant site and processed automatically, this process defines the push payments. However, in the case of pull payments, the customer initiates the payment processing, and money flows in the opposite direction.
The conventional methods for transactions, e.g., credit card payments, involve push payments. But bitcoin subscription payments are processed with the pull payment method. Constraints like these make it complicated to use bitcoins for subscription fee payments.
Following are the two ways to use bitcoin to pay the recurring fee:
Manual Subscription Fee Payment
Though manual subscription fee payment is not sophisticated enough, it works.
- As a merchant, you need to offer a SaaS product for which it is feasible to receive and manage digital currency.
- The merchant has to provide the subscriber with the bitcoin address to submit the recurring charges.
- It is the subscriber's responsibility to submit the subscription fee timely.
- And the seller is responsible for confirming that the payment is delivered to his account.
- If payment fails because of some reason, the seller has to communicate with the subscriber for follow-up.
Automated Subscription Fee Payment
When it comes to automating subscription charges payment in bitcoin, the system working both at the buyer and the seller side has to be automated. To automate the procedure, virtual currency wallets will be used. The system will notify the merchant about the failed payments. Automated software will be installed at the merchant side to deal with failed transactions.
The automation's ease is that the subscriber can leave it to the automated system to process transactions every month (e.g., if he has subscribed for monthly subscriptions). The process runs smoothly till the subscriber has enough money in the digital wallet.
Both the manual and automated subscription fee payment processes run smoothly when a subscriber trusts you enough to use custodial wallets (he shares his private keys with the system). However, things are challenging to manage when the subscriber does not trust you and uses a non-custodial wallet. Experts are working to overcome such limitations so that the subscribers can use their digital wallets to pay for subscriptions feasibly.
Conclusion
The subscription business is all about catering to more customers and customer retention. Subscriptions were automated to bring ease for the subscribers. Using an automated subscription handling platform, the subscriber does not even need to remember the date to pay his subscription charges. Efficient subscription management platforms facilitate retailers to automatically process subscription fee transactions after a month, week, or a year, etc.
Transactions in bitcoin can bring more ease for subscribers. They can avoid many pain points in the payment processing. For instance, people are reluctant to share their card details for online payments. They are fearful of information leakage. Payment processing in bitcoin is a way to avoid such checks. These are why many expert analysts sitting at Investopedia are sure of the success of the bitcoin for the payment of recurring charges.
