MIT Coop to accept bitcoin payments
From T-shirts to trinkets bearing the school logo, the COOP store at the Massachusetts Institute of Technology lets shoppers show off their high-tech bona fides. Now there’s another way: Customers can pay for their purchases using the electronic currency bitcoin.
The campus bookstore says it is the first in the nation to accept bitcoin, a fringe payment system that is gaining popularity for its low transaction fees and perceived security. Several major retailers, including Amazon, Target, and Victoria’s Secret, accept bitcoin payments.
COOP president Jerry Murphy said the store is responding to student adoption. This fall, every MIT undergraduate will receive $100 in bitcoin from the student-run MIT Bitcoin Club, which raised more than $500,000 for what it calls the MIT Bitcoin Project.
A single bitcoin is worth almost $500 at the current exchange rate, roughly quadruple its value a year ago but down from a peak of $1,147.25 in December — so its buying power fluctuates greatly.
In retail, the risk of such a volatile currency is borne by the customer, not by the merchant. The COOP, for instance, can continue to list all prices in US dollars and a payment- processing software, called BitPay, will automatically exchange customers’ bitcoin money so the store receives dollars.
Bitcoin users hold their cash in virtual “wallets” they can access from computers or mobile devices. While most bitcoin purchases happen online, brick-and-mortar shops can accept payments on phones or tablets at the cash register.
Much of the appeal to retailers is that bitcoin transaction fees typically cost no more than a few pennies, instead of a few percentage points for many credit card purchases. Users are not required to divulge the personal information typically needed to verify credit card transactions, reducing the risk of identity theft. As with cash, anyone who holds a bitcoin can spend it.
On the flip side, hackers have successfully stolen bitcoins, and victims have no more recourse than someone whose $20 bill was pickpocketed.