Bitpay is the largest bitcoin payment processor worldwide. The company founded in 2011 has come a long way since then, and just recently started making significant changes to its business model.
This week the cryptocurrency payment processor Bitpay implemented the BIP70 Payment Protocol into their debit card bitcoin-to-dollar-load invoices. According to the company, the feature will prevent common payment errors and offer better security against man-in-the-middle attacks.
As BitPay wants to create more secure payment experiences, this change is only the beginning. The company firmly believes in its own software and tools. Introducing the Payment Protocol requirement will certainly herald some changes over time. Quite a few wallets support this solution already, which is good to see. The rest will either have to upgrade or risk losing functionality with all future BitPay services at some point. After all, this compatibility requirement will also affect QR code and online payments in the future.
The Payment Protocol is a bitcoin software implementation created in 2013 that claims to establish a more secure communication between merchants and customers. By using the protocol for invoices, payments and fees can be perfected, avoiding underpayments, overpayments, and fee rates that are too low. In addition to these benefits, it can help prevent man-in-the-middle attacks like the latest copy-n-paste bitcoin address changing malware.
“Payment Protocol does for Bitcoin what secured web-browsing (HTTPS) did for the internet — By using a payment protocol-enabled wallet, you can avoid mistakenly sending funds to an attacker, prevent underpayments and overpayments, and help your transactions to be received faster by Bitpay.”
Payment Protocol features
One issue with Bitpay’s new addition to their infrastructure is the fact that a vast majority of bitcoin-based wallets do not use the BIP70 Payment Protocol. Bitpay also details that it will soon require the Payment Protocol for payments, which leaves users only five wallets to choose from when using Bitpay’s services. The wallet clients that support BIP70 are the Bitpay Wallet, Copay, Mycelium, Electrum, and the Bitcoin core wallet.
“If your wallet is not on this list, it may fail to work with Bitpay,” emphasizes the Atlanta-based firm this week.
This means Bitpay invoices tied to a Payment Protocol URL will use the fastest median transaction fee rate. At the moment, according to Earn’s fee statistics, the quickest and cheapest transaction fee is 660 satoshis per byte. So today a typical median transaction size of 226 bytes will result in 149,160 satoshis or $23 at the time of writing. When paying a Bitpay invoice with the Payment Protocol feature, there will be a scannable QR code for wallets with BIP70 functionality and a little green lock icon for copying and pasting the URL. The payment will contain the approximate amount of network fees and transfer rate for how much BTC must be sent.
Bitpay has already started the Payment Protocol feature with its Visa debit card bitcoin-to-dollar load invoices and will likely require it for other merchant invoices going forward in 2018.