BitPay revises merchant service to be "free, unlimited, forever"

Atlanta-based bitcoin payment processor BitPay has taken a major step towards wooing new merchants, updating their service to eliminate credit-card interchange fees for basic merchant accounts. BitPay’s previous pricing system allowed entry-level merchants to process up to $10,000 per day in bitcoin payments for a flat $30 fee. Enterprise-level accounts will still receive substantial discounts, but are not currently eligible for the no-fee program.

In the announcement post on the BitPay blog, the company explained why a no-interchange fee system was needed by merchants:

For decades, businesses have watched their profits erode from rising processing fees. Today’s Internet payment system is built around credit cards, which were created in the 1950s — before the Internet existed. When card issuers began offering rewards and cash-back bonuses to shoppers, they started increasing the interchange fees to cover the costs. Without many alternatives, merchants have been forced to accept that interchange rates are not going down.

The new BitPay system will work with any implementation of their system, including plugins and their API.

The move brings BitPay’s offerings one step closer to that used by Coinbase, which is also free for merchants until the first $1 million sales in BTC, and with a 1% fee thereafter. By contrasts, credit card interchange fees are often 3-5% per transaction.