When you make a Bitcoin or Bitcoin Cash transaction, you are sending funds to a Bitcoin or Bitcoin Cash wallet address controlled by another person. When you pay a BitPay invoice, that other person is BitPay. An Unspent Transaction Output (UTXO) is the payment a wallet receives and then transfers away from the receiving Bitcoin or Bitcoin Cash address. This is the unit of Bitcoin or Bitcoin Cash which a wallet can then actually use in another bitcoin transaction.
The extra Network Cost in your total invoice covers BitPay's miner fee cost to do a UTXO sweep for your payment. You can learn more about the reasons for this extra fee here: https://blog.bitpay.com/network-costs/
Didn't I already pay my miner fee?
The cost for BitPay to do a UTXO sweep is different from the miner fee you also paid. Your own miner fee helps determines how fast your payment will confirm on the Bitcoin or Bitcoin Cash network. This is a function of the Bitcoin or Bitcoin Cash network. BitPay can NOT control confirmation times on the Bitcoin or Bitcoin Cash networks. To learn more bitcoin miner fees, click here.
How do UTXO sweeps work?
When you make a Bitcoin or Bitcoin Cash transaction, you are sending funds to a Bitcoin or Bitcoin Cash wallet address controlled by another person (or in our case, BitPay). What the payment recipient receives and then transfers away from the receiving address is called an Unspent Transaction Output (UTXO). This is the unit of Bitcoin or Bitcoin Cash which can actually be used in another transaction.
The miner fees paid to combine and sweep UTXOs from BitPay's receiving addresses are a major part of BitPay's increased network costs. This cost is not unique to using BitPay – any business or person accepting on-chain Bitcoin or Bitcoin Cash payments will incur the expense of consolidating UTXOs from each payment they receive.
How can I reduce this cost?
If you want to reduce extra Network Cost on your BitPay payments with Bitcoin (BTC), you can reduce your overall fee costs by making Bitcoin purchases in larger groups. This will offset the cost across a larger value. So instead of making ten $10 payments, try to make two $50 payments or one $100 payment.
Because Bitcoin Cash currently has lower average Network Cost (due to insignificant miner fee levels), you may also choose to pay a BitPay invoice with Bitcoin Cash if you are concerned about high costs.