In order to solve this dilemma how about the following:
i) the full shipping address is never asked for as a data item, but rather each individual element is asked for, down to the granularity of house/apartment number.
ii) the payee marks each element as optional or mandatory. One can imagine that Country would almost always be marked as mandatory in the first instance.
The GUI then asks the user to consent to filling in each field, and he/she can miss out all the optional ones.
If the payee finds that the mandatory fields are insufficient to compute the shipping costs then it has to change some of the optional fields to mandatory and ask again. This draws a balance between protocol overhead and privacy concerns. Those users who are less concerned about privacy will provide all the optional information immediately whilst those users who are more concerned might have to have a few rounds of merchant driven negotiation.
Once the shipping costs have been computed, then any further mandatory data can be requested.
In terms of user experience the GUI can keep presenting the address until the merchant is satisfied. After the user clicks 'send' the screen will either disappear or one or more optional flags will change to mandatory and the user has to add more information and click 'send' again.
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