I wrote a post on reddit somewhere back in January about something similar. It wasn't multi-party in, multi-party out, but one party in, multi-party out.

Here's a writeup how it would work:

Most financial relationships between merchants and suppliers, employers and employees, subscriptions, leases, mortgages, rent, etc ,etc, are long standing relationships. The vast majority of payments flow through these channels. And we can do some really smart things with these.

Let’s look at a website.

A customer selects a number of goods on a website and proceeds to checkout. He selects bitcoin as payment option. The web server now contacts the payment router and requests a payment request for $X. The payment router now looks in its local database of creditors and starts to query a number of them for partial amounts. A couple of seconds later they all respond and the payment router now combines these payment requests, signs it, and feeds it back to the web server. The web server presents this payment request to the user, user makes payment and done. For the next customer, a completely different set of creditors could be selected, etc. You get the picture.

We just settled a number of partial debts across multiple creditors with a single transaction. Not only that, but for all we know, those creditors did the same thing and also forwarded the request to one or more of its creditors. So it could very well be that we went several hops deep (depending on the allotted time, I’m sure prefetching could work here as well).

The velocity of those coins just increased significantly.

And there are other advantages too:

- Number of transactions is reduced, reducing pressure on the blockchain;
- Large part of the debt settlement between multiple parties is now extracted out of the transaction chain, increasing privacy amongst all participants;
- No changes needed to user wallets to make this work. BIP 70 support is enough;
- No changes needed to Bitcoin either, it’s all just plain transactions;
- Would still work nicely with multi-party transactions (escrow) - the final payout transactions would contain the routing part;
- Hardly any real protocol development needed, other than the communication between payment routers, which should be minimal;
- Accounting side is simple. The relevant transaction outputs show up on both sides of the balance sheet;
- It’s completely distributed. The relationships are all one to one, but can chain and fan out quite easily and dynamically;
- You could still forward parts to a payment processor for conversion to fiat;
- Since you never take possession of (some) of the payment, there’s no exposure to volatility on the bitcoin that’s forwarded;
- Graceful degradation - the payment router can even collect on a local xpub address if all other options fail.

There’s no way you’d even be able to come close to something like this using traditional payment methods.

It would work for individual users as well. You can either setup your own payment router, add your own creditors, your savings xpub, your spending xpub, etc, and have your local wallet send out payment requests to that router when you request payment from someone. Your employer can hook up to it and trickle your salary in that way or you could use a service setup by some company to handle it for you.