Bitpay is constantly at the receiving end of flak from the Bitcoin community for various reasons. Besides the usual reasons of its open support to Bitcoin Cash, poor customer support, these are three main reasons:High Network Fee for Bitcoin payments:
Bitpay has recently started charging its clients for as what they have termed as network fees. These network fees, which has gone as high as 7% of the payment, are being imposed at a time when the transaction fees are at its lowest levels in the past few months and payments being getting verified for a few satoshi.Accepting Bitcoin Cash is kept free unlike Bitcoins.
This cannot be justified for, as no other payment gateway is imposing such fees, pushing merchants to look for various alternatives to Bitpay.No Segwit support
Despite sending large number of transactions through the bitcoin blockchain, BitPay has been lagging in adding segwit support. This is unnecessarily increasing transaction cost and network load. Earlier this year @BitPay announced to much fanfare that they support SegWit. Udi Wertheimer points out that this was just their usual misinformation PR at work.
In his research on this so called “network fees” figured out that Bitpay’s SegWit claim was just a PR stunt :
#Tweet 1: “ BitPay isn’t receiving funds on SegWit addresses. SegWit would save them 60%+ on the consolidation fees that they’re rolling over to customers..”
#Tweet 2: “..All they actually did was “adding support for receiving funds *from* SegWit users”. Which is meaningless.”
#Tweet 3: “Accepting payments “from SegWit wallets” doesn’t require any change on the receiver’s end (unless they had a *really bad*, unsafe, non-standard system to begin with).”Restrictions on businesses:
Bitpay is now one of the largest payments processor for Bitcoin payments and yet there are some strong divergences from Bitcoin’s philosophy. Unlike Bitcoin, its functioning is not based on complete independence. Decision making happens in board rooms which, as it is evident, has its priorities different from greater good.
Besides these differences in values, they have introduced restrictions on certain industries. Some of these industries are core to the growth of cryptocurrencies in general and Bitcoin in particular like sale of Bitcoin mining instruments. Merchants can now sell these instruments using Bitpay only if they have written permission from them. More details can be found in this recent Cointelegraph article.
Merchants are now looking for alternatives, as can be seen in this reddit thread. Each business has its own requirements and therefore one must choose a payment gateway suitable to their business model.Below we list out the various gateways in the market and their pros and cons to help you get started with accepting Bitcoin payments based on your needs.
- Pros: Blockonomics is aligned well with the Bitcoin philosophy and is a permissionless, Direct to wallet payment gateway. Transactions are charged a cheap 1% fee for unlimited transactions, with your first 10 transactions are free. They also accept numerous cryptocurrencies using a built-in integration with Shapeshift. Blockonomics is also a leader in segwit adoption in bitcoin space — making it a must if you’re having trouble with customers unhappy with high miner fee. Payments go direct to your own wallet too — letting you own your Bitcoins instead of holding it at an exchange.
- Cons: Blockonomics does not allow for instant fiat conversion upon payment delivery, meaning you’ll have to send it to your local bank manually.
- Pros: CoinGate holds a similar fee structure at 1% transaction fee for as many transactions as you’d like. Similar to Blockonomics, they do allow you to accept 50+ cryptocurrencies beyond Bitcoin using Shapeshift. CoinGate merchants are also Segwit compatible for optimal mining fees and speed. Also, incoming Bitcoins can be converted to fiat in real-time.
- Cons: Payments you’ve received are held in CoinGate’s wallet until you‘re ready to transfer them out.
BtcPay — BitPay’s bandaid
- Pros: Since Bitpay appears to have an excessively long cons list, BtcPay has arrived to help solve some of those inefficiencies. BtcPay is a layer over Bitpay using their invoice API — which is super simple to migrate to for existing Bitpay users. BtcPay also makes purchases Segwit ready, and is built on an open source platform. Their support efforts are also top notch.
- Cons: While it fixes many of the problems that Bitpay users face, they are experiencing a low adoption rate. Mainly because it still requires you to setup/manage your own bitcoin node. Setup is technical and require installation of several libraries/packages, though the founder Nicolas Dorier is very helpful. Not for the weak hearted !
CoinPayments — Cheaper than your average
- Pros: Proving one of the lowest transaction fees, Coinpayments offers a 0.5% transaction fee to merchants. They also allow direct conversion to fiat from over 100 cryptocurrencies. Plus, they’re Segwit compatible.
- Cons: Like most payment processors, your incoming Bitcoins are held by in their wallet — with an additional transaction fee if you’re looking to send it to your personal wallet. Also, support appears to be lacking for some of their merchants with inquiries.
PayBear — The new Kid on the block
- Pros: PayBear is relatively new in the space with the pulic beta being out recently in Oct’17. They have a good eye for design and the UI is easy on the eyes. Unlike Blockonomics, their payment system is not direct to wallet. They have some pretty interesting introductory offers up for grabs and they also support multiple currencies.
- Cons: API integrations are still not released and only supports Woocommerce, prestashop and Opencart at the moment. They have plans to introduce crypto to crypto conversions in future but is not available as of now. Funds from customer’s wallet are sent to Paybear which is then sent to merchant’s wallet, this is a security risk and adds extra network costs for payment forwarding
Thanks for reading. Feel free to check out our white paper for more details about accepting bitcoin and chat with us here .
This is a companion discussion topic for the original entry at https://insights.blockonomics.co/top-5-bitpay-alternatives/