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BitPay allows merchants to price their products in USD, and receive USD when a customer pays using Bitcoin. The exchange rate used at the time of purchase is calculated somehow by BitPay, but their website doesn't indicate how it's calculated.

If at the time of purchase BitPay immediately sold an equivalent number of bitcoins on, say, MtGox then the exchange rate used should be pretty close to the highest Bid price at that point in time.

Many people must have purchased items through BitPay. I'm interested in knowing what exchange rates were available on MtGox (or other exchanges) within a few minutes of the time of purchase, and what exchange rate was provided by BitPay. Can anyone provide an example of this?

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Their website does have the methodology by which the exchange rates are calculated.

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    Thanks! I had no idea it was documented. This will do nicely as the answer. – Highly Irregular May 8 '13 at 7:43
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Bit Pay's exchange rates are between 5 & 10% lower than the MT Gox quoted market rates. This is not made clear on their website. They advertise a rate of 1% flat which is misleading.

  • Mt. Gox has been having Cash Flow problems: People can't get their dollars out of the exchange, therefore Dollars on the exchange are worth less and buy less bitcoins. Because of that some other parties have moved to other sources for their spot price. – Murch Oct 24 '13 at 0:38

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