Bitcoin payout service
Bitcoin payout services are used to execute bitcoin payouts. A Bitcoin payout service is paying a third party if you don’t know their Bitcoin address.
In the case of a Bitcoin payment, the payer has been informed by the payee of the Bitcoin address to which the payment is to be made.
The solution presented here is for those business transactions where a credit is to be made, but the Bitcoin address of the payee is not necessarily available.
This may be, for example, when:
- Credit note – An online merchant wants to refund its customer the purchase amount because the goods have been returned.
- Remuneration to artists and performers
- Commissions – payments of commissions and payment claims to affiliates, service providers and suppliers
The payment process is such that the payer deposits the Bitcoin amount on a Bitcoin wallet. After that, notifies the payee that he can collect the Bitcoin amount.
The payee goes to the notified web address and enters his own Bitcoin address there to retrieve the funds.
In the case of an online merchant selling goods, it happens that the goods are returned by the customer and a credit note has to be issued accordingly. But also in cases where a customer has overpaid and you want to refund the overpaid amount.
This process is described in more detail in a separate article: Refund / Refund to customers.
Likewise, it is suitable for making bulk credits. Whether it is to make commission payments to a variety of advertising partners (affiliates) or to employees, business partners and service providers to receive Bitcoin in the form of a payout.
Implementation of a Bitcoin payout
The issuance of the credit can be implemented with the help of the BTCPay Bitcoin Wallet and the Pull Payment.
The first step is to create a BTCPay Store on the BTCPay Server. How to set up a BTCPay Shop can be found at: Set up BTCPay Shop.
When configuring the store in the Derivation Scheme, we specify that we want to use the internal BTCPay wallet. To learn how to create a BTCPay wallet, see “How to create a BTCPay wallet“.
After the BTCPay store is created, we switch to the Wallet section
In the first step, we need to provide funds on this wallet so that the credits can be made from this wallet.
We select our wallet and click Manage
Click on the image to see the picture in large and in detail.
Click on the image for detail view
We click Receive and can generate a Bitcoin address to which we can make a deposit.
We get the QR code displayed and deposit the bitcoin
If we click on Transaction, we will get an overview of all transactions that have been made on this Bitcoin wallet. Our deposit is displayed here.
Now we have the required balance to issue a credit.
We switch to the Pull Payments section and have the possibility to create a new pull payment by clicking on “Create a new pull payment”.
In the input field the name is entered, as well as the credit amount and the corresponding currency. Proposed is BTC for Bitcoin.
However, Euro can also be used, for example, if the currency pair BTC_EUR has been stored accordingly in the BTCPay store settings.
We automatically get to the overview page of the created credit notes. When we click on View, we are redirected to the link through which the customer can claim his credit.
For example, this link looks like this:
https://btcpay.coincharge.io/pull-payments/hXJMKanEt6bKdParq3qkLNxrq7i
and can be sent to the customer by email.
For example, when the payee opens the link, he gets this page:
(Credit amount in BTC)
(Credit amount in EUR)
The recipient of the payment url can enter their own Bitcoin address in the Destination address field and request the payments via “Claim Now”.
After that, the following page will be displayed as confirmation to the payee.
The payee has “only” requested the payment. However, the payment has not yet been disbursed. For security reasons, it is necessary that the payment is approved by the wallet administrator.
In the status window, the administrator receives a notice that a credit has been requested.
The administrator switches to the payouts section and is shown all transactions that are waiting to be paid out.
The corresponding transactions are marked and released with “Confirm selected payouts”.
After that, you will be redirected to the Send section and the adjacent page will be displayed.
The recipient’s Bitcoin address and the requested amount are displayed.
In addition, the transaction fee is displayed, which must be paid. It can be decided how fast this transaction should be executed. According to the speed of disbursement, the amount of the fee is calculated.
Likewise, it can be specified whether the costs of the payout are borne by the payer or by the payee. If the costs of the transaction are borne by the payee, these fees are deducted from the payment amount (Substract fees from amount).
After that, the payment must be signed. This is done via the “Sign with …” button.
Since we use the BTCPay internal hot wallet to manage the balance, we sign with “Sign with – the hot wallet”.
We then get an overview of the transactions once again and then click on Broadcast it
After the payment is confirmed, we get the transactions made displayed in the transaction view.
Payouts additionally receive the label Payout.
Summary for bitcoin withdrawal service
As an operator of an online store you will be confronted with the situation that you have to issue a credit note to your customer. The issuance of a credit / refund on a previously made Bitcoin payment is explained in the article “Refund of a Bitcoin payment“.
The payment system presented here is suitable if you want to make a large number of payments to a large number of payees (bulk payment).
The payment system presented here is suitable if you want to make a large number of payments to a large number of payees (bulk payment).
This simplifies the processes for all parties involved and ensures a high level of security through the multi-level approvals.
The payer is also free to choose whether the credit should be in Bitcoin or in Euros. Normally, the customer will be offered a credit in Euros, since the original purchase amount was also in Euros.
The system automatically calculates the bitcoin amount at the time of the payment request.
With the Payout system, a Bitcoin payment can be made to anyone whose email address is known. The recipient of the email message can then decide for himself to which Bitcoin address the credit should be made.
The system presented here allows payouts in Bitcoin only. The crediting of credits via Lightning is currently not yet possible.
The solution presented here is very easy to administer via the web interface. For operators of affiliate programs or merchants and service providers who have to make a high number of payouts, the solution presented here can also be automated through an API connection.
You can find the API interface description for an automated Bitcoin payout service at: Pull Payments Management
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