Explainer
Payment Pointers are a standardized identifier for payment accounts. In the same way that an email address provides an identifier for a mailbox in the email ecosystem a payment pointer is used by an account holder to share the details of their account with a counter-party.
A Payment Pointer resolves to a URL (with the https scheme) that can be used to discover the Open Payments endpoints for interacting with the account. Using the Open Payments protocol the counter-party can initiate a payment to or from the owner of the Payment Pointer.
Syntax
Payment Pointers start with a $ character to distinguish them from other identifiers and make it obvious that they are related to payments. To convert a Payment Pointer to a URL the $ is replaced with the standard prefix of a secure URL, https://.
Payment Pointers don’t contain query strings or fragments, however Open Payments MAY define standard parameters that can be used by a client when connecting to an Open Payments service endpoint.
Flow
When making or a receiving a payment, a user passes a Payment Pointer to the counter-party who resolves the corresponding URL.
For most use cases the counter-party will extract the origin from the URL and append the path /.well-known/open-payments to form the URL of the Open Payments server meta-data endpoint.
To avoid unnecessary network requests when doing Web Monetization the client skips this step and uses the Payment Pointer URL as the Web Monetization endpoint.