Bitpay vs Coinbase, Comparing Bitcoin Payment Providers August 06 2013, 0 Comments

TL:DR Coinbase has an almost unfair advantage of having customer accounts for their wallet service. This enables a uniquely smooth checkout/payment process for Coinbase users, of which there are +300,000, and they will likely grab a large portion of new, more mainstream users.

Both are great for simple, setup, and creating single use buttons for a specific product. If you already have a shopping cart, Bitpay has plugins available for a larger number of cart integrations, but Coinbase is adding them at a staggering pace. I encourage you to look at which carts each one services. Both services are excellent, and how they suit your needs may vary.  No matter what I say, I do not doubt that payment technology in bitcoin will be evolving very rapidly.

I recently went through the excercise of choosing between BitPay and Coinbase. I'll try to outline what I learned from that experience. Bitpay is focused almost entirely on payment processing for merchants. Coinbase is a more full service approach. It combines:

  • an online wallet
  • the ability to transfer money from a bank account
  • the ability purchase bitcoin directly through their service (though the BTC actually comes from the major exchanges)
  • payment processing similar to BitPay
At http://coinforest.com, we went with BitPay because of this focus during our inital setup.  I don't know if the decision would be the same if it were now.  I'll try to outline in more detail the actual difference between the two services available to merchants on a feature by feature basis.

Simple payment buttons

Both services make it very easy to create a button that you can post on your site, for checking out and paying for a specific item. Both allow you to set the price in either BTC or USD. If set in USD, the BTC price will be determined based on a weighted average of the major exchanges. When we was getting set up, Bitpay had the edge in this case, as they allow you to create custom fields, and let the user specify any quantity of the item to purchase and pay for. October Edit: Wow... In response to this answer, Coinbase has actually just added this ability to add fields for shipping addresses and other custom data! http://blog.coinbase.com/post/64... From what I can tell, they're quite even in the "Simple Payment Buttons" area now. This is the setup we used for our first sale:
It took minutes to set up and begin accepting sales with a reasonable level of functionality. Here's the analogous Coinbase checkout:

Invoicing

There is really no material difference that I can see here. Enter some numbers and an email address, send to client.

Callbacks(Coinbase) / Hosted Checkout(bitpay):

As far as I can tell, these are fairly similar. The site collects the users information, POST it to Coinbase or BitPay, the service takes and verifies the payment and then POSTS it back to your site. The most significant difference I can see is that Bitpay allows you to post as many custom parameters as you like, whereas Coinbase allows only one. Though that's not an insurmountable problem

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Shopping Cart Plugins

Previously, I saw Bitpay as the clear winner here. However, Coinbase has been adding shopping cart plugins at a rapid rate. For an up to date listing, and to check if your cart software is supported, see their own plugin listings: Bitpay: https://bitpay.com/bitcoin-shopp... Coinbase: https://coinbase.com/docs/mercha...

 

Fees

Coinbase is actually free for their services, but charge 1% to change bitcoin into fiat currencies. They've also recently announced that the first $1,000,000 in processing fees will be waived. Bitpay charges 1% for transaction processing, but then does the exchange and direct deposit to your bank for free. Bitpay has recently announced subscription based services, which waive the processing fees. The subscriptions start at $30 per month, and have varying tiers with added features and increased levels of support, up to a dedicated account manager.

 

 

Exchange Rates

The rate that Bitpay or Coinbase will convert the bitcoin that you accept, into dollars is calculated based on their own calculations using the current exchange rates on the sites where they buy dollars from. From a few spot checks I've done, Coinbase tends to give a better price to the customer most of the time. ie. they value BTC higher against USD. You can compare them: https://bitpay.com/api/rates (see the first number) https://coinbase.com/api/v1/pric... Keep in mind, that whether or not a higher exchange rate means more money for you is not clear cut. It depends on where or not you are converting to fiat or keeping bitcoin. Why?: Presumably, if you send a user to Coinbase/Bitpay's checkout to purchase a $10 item, you will use Coinbase/Bitpay's exchange rate to calculate how much bitcoin they need to pay you. So an exchange rate that places a higher value on bitcoin will mean your customer pays less bitcoin. If you instantly convert to dollars at same exchange rate, it really means no difference to you... but customers may have a preference for the service that tends to value their bitcoins higher.

 

 

Customer Experience

Here's the Bitpay payment page:
Nice, clean simple. It allows you to copy an address into your desktop wallet to send to, or snap the QR code to pay from your phone's wallet. Here's Coinbase's
A few nice UX things here: If a Coinbase user is already logged in, or logs in on this screen, they can pay simple by clicking a button. Which is a big improvement for the less technical users that are coming into Bitcoin recently. They can also click "send using a bitcoin address" to get an address and QR code like so:

A slight drawback is that one extra click required to pay with a bitcoin address.

 

Checkout Design Aesthetic

A matter of taste certainly. Bitpay has a little bit of a retro feel, which I think is intentional, and over all, it seems geared towards a more "traditional Bitcoin user" Coinbase is more current in it's use of a flat UI, and their approach, slightly prioritizes their own users, though getting to the QR code and wallet address is only a click away.

 

Recurring Payments

This is a tricky thing for many subscription based services that would like to accept bitcoin. If I have your credit card on file, I can just charge it again each month. There's no way to get pre-authorized permission to charge a bitcoin address each month (short of getting their private key). Coinbase enables recurring payments for services, if and only if the user has a Coinbase customer account.

 

Anonymity

I've been asked by someone which service would provide better anonymity to their customers. If a customer were to use Coinbase's check out via their account, then Coinbase would have a record of that. Otherwise, if the customer elects to send payment via the bitcoin protocol using a wallet address both services should be equivalent.

 

Conclusion

Bitpay makes it easier to get up an running. Coinbase makes it easier on your users. I hope we see continued innovation and competition in this space. There are a couple other options listed here as well: https://www.weusecoins.com/en/me... If you're a merchant that's considering adopting bitcoin, you might also consider testing the waters with us at http://coinforest.com. We run group buying deals to help you directly engage with the bitcoin community.  We only accept bitcoin, but we'll happily pay you in dollars to prevent your CFO from freaking out. :)