BitPay's New Plan

A user on Reddit checked out the exchange rate spread between them and Coinbase and found was about $1. That is about 0.17% at the current prices. An incredible deal by any measure.

rhino3692• 12 years ago

Almost too incredible. They must dump the coins on the market right away to less volatility risk.

Did they check the exchange rate for buying on Coinbase or selling. Coinbase might be playing with the exchange rate too.

mrb2• 12 years ago

BitPay said they will get (most?) of their revenue from their paying Business and Enterprise plan customers: http://www.reddit.com/r/Bitcoin/comments/2c5f1l/bitpay_here_...

runeks• 12 years ago

They claim to get you market rates: https://bitpay.com/bitcoin-exchange-rates

opendais2• 12 years ago

Idk, at $300/month/business...I doubt it. The reality is a business doing $30k/month is going to pay for the phone support.

Hell, I'd do it at $6k/month. At which point, they may actually make more that way.

wesley• 12 years ago

Very nice, does anyone know if they'll ever accept anything other than bitcoin? Altcoins like NXT etc?

wyager2• 12 years ago

Why would they bother? The transaction rate (in USD/time) is microscopic in altcoins.

mapleoin• 12 years ago

The transaction rate (in USD/time) is microscopic in altcoins.

I believe the word you're looking for is liquidity.

josu3• 12 years ago

They said in their recent AMA that they have no plans of accepting altcoins.

donretag• 12 years ago

Remember usa.net/netaddress.com?

"With USA.NET® Net@ddress®, ... have one email address for the rest of your life for free!"

http://web.archive.org/web/20001218082700/http://usa.net/per...

I'm not buying into free + forever.

mastermojo• 12 years ago

Well, free for as long as the company is around. For the next couple years: Do you expect Google (search) to be free? Facebook? Mongodb?

Companies can build successful businesses around not charging for the core service.

jMyles• 12 years ago

Mongodb doesn't really belong in that list, though.

nly• 12 years ago

Saying Google and Facebook have built successful businesses around free services is like saying dairy farmers have built successful businesses around offering cows free grass.

wmf2• 12 years ago

Realistically if BitPay screws up you take a few hours to switch to Coinbase and move on. It's not like an email address.

heynk• 12 years ago

If you use BitPay as a payment processor I don't think it would be as easy as, say, swapping out BTC addresses, because of different implementations of webhooks and other APIs.

ChuckMcM• 12 years ago

Remember the joke? "On the Internet, 'forever' is 2 years from now."

antr• 12 years ago

I won't use Bitcoin if transfers aren't free. Bitcoin is competing with my bank account, and to date I can transfer money all around the EU for free, and I've been doing so since 2006. I my case, Bitcoin won't work if the level of service is any worst/more expensive than my bank.

ericcholis• 12 years ago

Anybody have reading for a merchant evaluating Bitcoin as another payment option?

walden42• 12 years ago

Read up some articles from Coinbase or Bitpay. You can also contant Bitpay with any questions you may have and I'm sure they'll be able to help you. Also feel free to ask me anything, as well, and I'll try to help you out.

kakashi19• 12 years ago

the part scares me the most - "Free Forever"

Istof• 12 years ago

maybe that means that they plan to sellout

crxgames• 12 years ago

This is fantastic news. I just setup my online store to support Bitpay last night! Can't wait to see how this turns out. Even if they end up charging a percentage, paypal/stripe are almost 3% so anything less than that is great.

StavrosK2• 12 years ago

Can someone explain what this is, exactly? Is it a fee-free way for people to accept Bitcoin on their site/shop?

natrius• 12 years ago

It's a fee free way to effectively accept Bitcoin as debit cards. The local currency value of the transaction is deposited in the merchants bank account. The merchant never needs to care about exchange rate fluctuations.

There's really no reason for a merchant not to accept Bitcoin at this point.

StavrosK2• 12 years ago

Ah, thanks, so it's like Coinbase's Bitcoin thing, except with no fees. Very nice.

I don't much understand why people worry about the "free forever" part, though. Surely, if they become too expensive, you can just switch?

pbreit• 12 years ago

Rant: blogs lacking links to the company's web site (towards the top) are annoying.

bitcoinnerd4• 12 years ago

2 things I am thinking:

1. If Bitpay was making a lot of money on payment processing, would they have gone to free forever? No!

- The reason is payment processing does not generate much cash! Certainly nothing that can support a 60 person team that bitpay has.

- There is very little bitcoin payment volume and not expected to be much in the near future. Honestly, despite how much press coverage it gets whenever a merchant accepts bitcoin. No one is doing big volume through bitcoin. Certainly not at a volume that is meaningful to a processor.

- Bitpay says they processed 100m in transaction last year. That is false. Bitcoin price was around $100 most of the year. And in December it went to $1000/btc. And so they took $1000 and applied that to all the sales throughout the entire year

- They recently have a massive change in strategy when Tony Gallipi stepped down as the CEO and Stephen Pair became the CEO (original CTO). This is important, because since then the strategy became open source focused (very much like Redhat for bitcoin)

2. Bitcoin payment processing has incredibly low barrier to entry.

- Unlike visa and mastercard which has massive barrier to entry. Vanilla Bitcoin payment processing really just involves less than 100 lines of code. Like

Step 1: Use BIP32 to safely and securely accept payments (Keep the private key offline and derive addresses using the master public key on the server).

Step 2: Write a little script to run locally to hook up to a API to sell the bitcoin. Voila, you have basically got bitpay.

Like many other internet based service, the fees eventually trends towards 0. Unfortunately, monetization of bitcoin payments is going to look very different than the traditional visa/mastercard/paypal model and it cannot come from vanilla fees alone.

Because what used to be proprietary network/technologies has been mostly replaced by the bitcoin protocol itself. And so value has to come from somewhere else.

wcummings2• 12 years ago

Bitpay says they processed 100m in transaction last year. That is false. Bitcoin price was around $100 most of the year. And in December it went to $1000/btc. And so they took $1000 and applied that to all the sales throughout the entire year

Did they say this, or are you just conjecturing?

bitcoinnerd4• 12 years ago

It is pretty much open secret amongst the bitcoin crowd. They didn't announce it of course. But next time you meet someone from bitpay, explicitly ask them how that $100m is calculated.

andrepd• 12 years ago

Voila, you have basically got bitpay.

Yeah because their service can be reduced to 100 lines of code. Infrastructure, support, all the services they provide anyone could mimic with 100 lines of code, right? That's nonsense. All credit to bitpay for pushing the envelope towards mainstream adoption of Bitcoin.

bitcoinnerd4• 12 years ago

No. I mean, good on them for making it free. It is great.

And no, of course you can't replace everything they do with 100 lines of code. But you can get a fairly long way. If you don't need all these pretty consoles, things like quickbook integration.

However, the point remains: if you are a developer and you want to accept bitcoins. There are more and more third party APIs (blockchain APIs), reporting tooling (watch only bitcoin consoles). If you know a bit of bitcoin. It really is pretty easy.

Oh and I get it, what about scale? what about customer service?

My point is this: this is a vastly different industry then for example, visa or even stripe. Bitcoin Payment processing will trend towards extremely low fees. While visa provides something that no startup can do in house, what bitpay provides can be done securely in house over a few weekends.

And bitpay gets that. My speculation is that this is part of a greater strategy to abandon paymenet processing as the core and go towards redhat for bitcoin

mrb2• 12 years ago

Your post is full of conjectures, outlandish claims, and of course no data to back any of them... "not expected to be much volume" - seriously? BitPay is seeing an insane growth: https://news.ycombinator.com/item?id=7974197 - And on CNBC Stephen Pair recently said BitPay gains 500-1000 merchants every week: http://www.youtube.com/watch?v=f8YSivdLKf0 Claiming they lied about doing $100 million in 2013 (this rumor is apparently being spread by a few anti-Bitcoin reddit posters...) is equally ridiculous. BitPay is currently processing $1 million/day in sales: http://finance.yahoo.com/news/bitcoin-payments-pioneer-bitpa...

BitPay has 30,000 merchants, and sells 2 plans on top of their free service: business and enterprise. Assuming 1%-5% of their merchants are subscribed to their business plan ($300/mo), and assuming the enterprise plan price is sold for 5x this value (negotiable, on average) but attracts only 1/5th the number of business plan customers (so 0.2%-1% of merchants paying $1500/mo), then it would give BitPay between $2.2 million and $10.8 million of revenue per year. $2.2M would not make BitPay cash-flow positive, but $10.8 would certainly do it. In that case it is a no-brainer that they would make their basic service free: they would entice merchants to give BitPay a shot, and BitPay would profit from the small percentage who later decide to upgrade to a business or enterprise plan.

twodayslate• 12 years ago

They are planning on making their money thru their Business and Enterprise plans

https://bitpay.com/pricing

bitcoinnerd4• 12 years ago

I don't buy it.

How much money are they going to make from those plans? A grand here and there from the big clients and a hundred bucks from the small clients?

Their annual run rate is at least 6-7 million dollars a year if not more.

I think this is just part of a greater shift in strategy in focusing on becoming the redhat for bitcoin. And thus opening up all their payment processing tech for free.

Pure speculations, but I will not be surprised if they eventually open source their core payment processing as well.

BitPay's New Plan

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