A payment protocol was added to the core Bitcoin system recently. The details on the Bitcoin Payment Protocol are here.
From that link, the key attributes of this payment protocol are:
- Human-readable, secure payment destinations– customers will be asked to authorize payment to “example.com” instead of an inscrutable, 34-character bitcoin address.
- Secure proof of payment, which the customer can use in case of a dispute with the merchant.
- Resistance from man-in-the-middle attacks that replace a merchant’s bitcoin address with an attacker’s address before a transaction is authorized with a hardware wallet.
- Payment received messages, so the customer knows immediately that the merchant has received, and has processed (or is processing) their payment.
- Refund addresses, automatically given to the merchant by the customer’s wallet software, so merchants do not have to contact customers before refunding overpayments or orders that cannot be fulfilled for some reason.
In my view, this is an important addition to Bitcoin and addresses a number of limitations on using Bitcoin for payments.
Our portfolio company Coinbase, which offers the leading Bitcoin merchant payment solution in the market, has implemented the Bitcoin Payment Protocol. Their blog post about this is here.
So if you are a merchant and you want to accept Bitcoin from your customers and you want the advanced functionality that the Bitcoin Payment Protocol offers, you should check out what Coinbase offers. You can do that here.
