BitPay, Payment Protocol (BIP-70), and Users' Bitcoin Payment Experience
Some users of BitPay’s service have been inconvenienced by our requirement to use Payment Protocol (also known as BIP-70*). Because we require Payment Protocol payments, some users have had to switch to one of the compatible wallets to make payments.
We've written before about our reasons for moving quickly to a Payment Protocol requirement. We wanted to take a moment now to give some more background on our decision.
Dramatically Reducing Costly Payment Errors
For a while now, we’ve wanted to reduce or completely eliminate payment errors to BitPay invoices. Payment errors occur when someone pays too much, too little, too late, or their payment doesn’t include a sufficient miner fee (resulting in a delay in confirmation). These are not isolated incidents. Before Payment Protocol, wallets or exchange accounts not suitable for spending (along with user error) created more than a thousand of these errors for BitPay purchasers every week.
As bitcoin has grown, more and more bitcoin users rely on BitPay merchants for their day to day expenses. Our merchants rely on us to make sure payments happen successfully, and their teams feel the pain of payment errors. And while we’ve automated refunds for many payment errors, they’re still terrible experiences for customers, who are unable to complete their orders.
Protecting Users from Unnecessary Miner Fees
While a terrible user experience is one thing, adding to the congestion on the Bitcoin network and paying unnecessary fees to miners is another. In recent months, miner fees have increased dramatically as usage of the Bitcoin network has skyrocketed.