Typically a BitPay invoice is only active for a time period of 15 minutes. We chose this number as a compromise between convenience and risk, meaning the time window should be long enough for a customer to launch their wallet application and send the transaction, but not too long because of the exchange rate volatility.
Since our launch in 2011, BitPay has always guaranteed the exchange rate to the merchant from the point of invoice creation, as long as the buyer pays within the 15 minute time window. This takes the exchange rate volatility risk away from both the merchant and customer and shifts it to BitPay.
When payments arrive after the invoice has expired, they still arrive at BitPay (they are not lost) however they are not automatically applied to an invoice, and the exchange rate is no longer guaranteed. The merchant has the right to return the payment, or have BitPay ask for more BTC if the exchange rate has dropped, meaning more BTC is needed at the spot rate to pay the amount of the original invoice.
Because of this time window, BitPay only recommends wallets and wallet services which broadcast the bitcoin payments immediately, and do not deduct the fee from the payment amount (fees should be subtracted from the user’s remaining balance, not from the amount being sent). The list of our recommended bitcoin wallets is here.
Over the past week, many transactions coming from a popular online wallet service Coinbase were arriving many hours, and sometimes several days after the buyers had sent the transactions. The bitcoin wallet service did not actually broadcast the transactions to the bitcoin peer-to-peer network for many hours or days.
These payments are now arriving with the current exchange rate in the mid 60s, but the invoices were created over the past few days where BitPay guaranteed an exchange rate in the low 70s. The funds received now are approximately 10% below what is required to cover the expired invoice.
BitPay realizes that the buyers in this situation are not at fault for this delay, and so BitPay will not be asking the buyers to send an additional 10% worth of bitcoins to cover their invoices. BitPay will manually apply the payments to the expired invoices and consider them paid in full. Merchants will receive the IPN after the payment is applied.
For this particular set of circumstances, BitPay will assume the 10% loss on these invoices so that the buyers, and our merchants, are not affected by the inconvenience of the online wallet service that experienced technical difficulties. This applies to the specific dates and times and specific wallet service in question, and not for all late arriving payments.