Both BitPay and Coinbase are big names in the crypto space. They share lots of similarities yet have unique differences. Coinbase is one of the leading cryptocurrency exchanges in the world. On the other hand, BitPay is one of the leading crypto payment gateways in the world.
The differences arise out of the need to cater to unique use cases. BitPay focuses on providing crypto payment solutions while Coinbase focuses on providing crypto trading solutions. Yet, there are a lot of convergent points in their solutions that may make differentiating them not a straightforward affair. Not being able to differentiate them can make it difficult to choose one over the other. This is why we have to find the difference that matters while still appreciating the convergent points.
Key differences that should guide your choice
In choosing between two competing alternatives, it is important to go for the difference that makes the difference. In this battle, the following are the important distinguishing parameters to consider:
1. Initial value proposition
BitPay started as a Bitcoin payment processor. While it has expanded to include other digital currencies, it remains a payment processor. Thus, it has stuck to its initial value proposition as a payment processor.
On the other hand, Coinbase started as a cryptocurrency exchange. However, it has diversified to incorporate other value propositions such as wallet services, swapping services, payment processing services, fiat currency services, educational services, and crypto assets custodial services. Nonetheless, these are ancillary services tied to the cryptocurrency exchange. For more see
- Coinbase Wallet Vs Vault: Which One Is Best for You
- What Is the Difference Between Coinbase and Coinbase Wallet?
- What Is a Coinbase Vault and Is It Any Good for Storage?
2. Niche focus
Coinbase primarily focuses on crypto trading while BitPay primarily focuses on crypto payment processing.
For comparative purposes, Coinbase is like the Amazon of cryptocurrencies while BitPay is like the PayPal of cryptocurrencies.
3. Payment solutions
BitPay, as we have stated before, is a cryptocurrency payment gateway. In fact, many medium-sized businesses use BitPay as a payment solution for their Coinbase crypto trades. To them, BitPay and Coinbase are not competing services but rather complementary services.
Coinbase provides payment solutions via its app – Coinbase Commerce – a business payment platform. However, it is limited in terms of features. Furthermore, it is tied to the Coinbase trading platform – thus, those who do not operate a Coinbase account won’t find a need for it.
When it comes to payment solutions, the main comparison should be between BitPay and Coinbase Commerce.
Compared to Coinbase Commerce, BitPay supports fewer coins. Coins supported by BitPay include Bitcoin (BTC), Bitcoin Cash (BCH), and a host of stablecoins such as USD Coin (USDC). On the other hand, Coinbase Commerce supports a wide variety of coins including almost all those supported by BitPay plus dozens more.
Crypto payment cards
BitPay has a prepaid crypto debit card known as BitPay Card. This is a Bitcoin debit card that facilitates Bitcoin payments plus other selected cryptocurrencies. This card operates similarly to a normal credit card except you have to load funds in advance. The great thing is that it is not tied to your wallet and thus safer.
Coinbase debit card is similar to BitPay card except that it is directly linked to your Coinbase Wallet. Thus, you must open a Coinbase Account to have and use your Coinbase card.
Fiat payment methods
Even if you have cryptocurrencies, there comes a time when you will need to transact using fiat currencies. Thus, fiat payment matters. BitPay supports more than 40 fiat currencies, including all major international currencies. This is expected since BitPay is a payment gateway.
On the other hand, Coinbase, via Coinbase Commerce, supports just about a dozen fiat currencies. These include the USD, EURO, GBP, CAD, AUD, JPY and SGD.
Apart from supported fiat currencies, fiat payment methods matter since they are the means by which these fiat currencies will be transacted via your bank account. Both platforms provide various payment methods.
Both BitPay and Coinbase have debit cards – BitPay card and Coinbase Card, respectively. In terms of cards, BitPay goes further by providing BitPay Gift Cards, a facility that lets you buy gift cards using crypto.
Since BitPay is a payment gateway, it has a higher speed of payment compared to Coinbase Commerce. Thus, for those who desire fast payment, BitPay is the better option since it takes less time to process and transfer payment.
4. Crypto wallets
The ownership of your crypto digital assets is evidenced by the private key. This private key is stored in a crypto wallet. Crypto wallets are simply virtual accounts where crypto assets are stored.
What differentiates BitPay wallet from Coinbase wallet? The two prominent types of wallets are distinguished by the following key differentiating factors:
BitPay wallet is a secure non-custodial crypto wallet that lets you have full custody of your private keys. Being a self-custody wallet, you are not worried about being locked out of your wallet. Hence, like other non-custodial wallets, you are in complete control of your crypto.
As opposed to BitPay, Coinbase offers custodial wallet service. This means that, even though you retain the public key to your wallet address, you surrender the custody of the private key to your crypto assets to Coinbase. While this may have some obvious benefits, it portends some risks. The common risk is that of being locked out of your wallet. Another risk is that of losing your digital assets when the custodian goes down.
Coinbase wallet is integrated with the Coinbase Exchange. Thus, you cannot have a Coinbase Wallet without opening a Coinbase Account. While this is a big plus to Coinbase users, it is a big disadvantage to those who would like to take advantage of Coinbase Wallet features but don’t want to hold a Coinbase exchange account.
On the other hand, BitPay wallet is in the form of a downloadable BitPay App. You don’t need to have an account to download it.
Another important integration is with third-party wallets. Both types of wallets allow you to integrate with a host of third-party wallets – including hardware wallets. Coinbase wallet easily integrates with Ledger’s hardware wallets.
Coinbase Wallet, being a hot wallet itself (with cold storage in the background), lets you integrate with other hot wallets such as Trust Wallet, and MetaMask wallet via Web3 API.
While Coinbase acquired the wallet company BRD, just like BitPay, it easily integrates with 1inch Wallet. The 1Inch wallet isn’t just a Bitcoin wallet but also an independent and autonomous DEX aggregator that supports DeFi coins and other major crypto coins. Through this partnership, BitPay can offer a lot of products and services that Coinbase offers. The biggest advantage of the 1inch wallet is that it provides gasless swapping and does not charge transaction fees.
BitPay Wallet App allows you to open multiple accounts. Thus, for commercial enterprises, this is a big plus as you can open different types of crypto wallets for different purposes.
Normally, a Coinbase exchange account allows you to have just one wallet. This limits flexibility.
Being a popular cryptocurrency exchange Coinbase wallet supports far more digital currencies compared to those that BitPay supports.
Nonetheless, both wallets support major cryptocurrencies including Bitcoin, Bitcoin Cash, Shiba Inu, and several others.
Both wallets provide advanced security features including two-factor authentication.
In addition to physical security features, Coinbase does offer FDIC-insured deposit protection to the crypto users’ funds.
When it comes to transaction fees, BitPay charges a flat rate of $0.25 plus a variable volume-based percentage rate. For a monthly cumulative volume greater than $1 million, the rate is 1%. For monthly cumulative volume less than $500,000, it charges 2%. And, for monthly cumulative volume between $500,000 and $1 million, it charges 1.5%.
On the other hand, Coinbase Commerce charges a 1% transaction fee for transacting in listed cryptos. If you transact in cryptos that are not listed, a higher transaction fee will be charged depending on the cryptocurrency being transacted.
When it comes to using the cards, both cards do not attract any fee when using them inside the US. However, outside the US, various charges are made depending on where you are using the cards.
Generally, Coinbase Commerce looks cheaper for those who trade crypto. Although, some additional charges may accrue depending on how you use the platform’s facility.
While BitPay operates as a standalone downloadable offline-first app, Coinbase operates as an online web app via the Coinbase exchange website. Nonetheless, both have a mobile presence via their respective mobile apps.
Comparing these two different types of crypto wallets, BitPay Wallet emerges as the best personal crypto wallet. Nonetheless, being the world’s most powerful crypto wallet, Coinbase Wallet emerges as the most ideal wallet for both traders and investors.
Major similarities that will augment your choice
The following are the major similarities between these two platforms:
1. Simple interface
In terms of ease of use, both platforms have a simple interface. However, Coinbase’s user interface by far more straightforward than BitPay’s user interface. Thus, newbie crypto users are likely going to have a greater user experience on Coinbase than on the BitPay platform.
2. Mobile apps
Each of these two entities has a mobile app. This makes it easy to transact on your mobile device. This means that you can easily buy and sell your crypto assets on the Coinbase app. On the other hand, you can send and receive and even swap digital currencies on your BitPay app.
3. Mobile wallets
The convenience of operating your digital currency via a smartphone cannot be overlooked. Luckily, both Coinbase and BitPay wallets have mobile apps that operate as mobile wallets.
4. Third-party support
Both platforms have essential third-party support that enhances user experience. For example, both BitPay and Coinbase have 1inch Wallet integration. Each has APIs that make it easy to integrate with third-party apps and services. For example, you can integrate Coinbase with BitPay, thus making each a complementary third party to the other.
Choosing the right cryptocurrency exchange can be mind-bogglingly confusing. There are so many exchanges out there. First of all, there are multiple types from order book exchanges to decentralized ones. Secondly, how do you know which one to trust? Even the large ones seem to implode from time to time. Thirdly, most sites aren’t exactly impartial in their recommendations. You won’t be shocked if I tell you that these websites rank exchanges according to whichever rewards them the most. Not to fret though. In this post I will walk you through 20 objective criteria you can use to choose a crypto exchange and find the one that suits you best. Read more.