Michael Dell founder and CEO of the big PC maker Dell, announced via Twitter TWTR +0.49% on Friday that his eponymous company will start accepting bitcoin as a payment option for anything purchased on the company’s website.
For bitcoin, it’s one of the biggest signs yet of mainstream acceptance. With nearly $57 billion in sales in 2013, Dell would be by far the largest company to take bitcoin. Dish Network, which began accepting bitcoin in May, had $13.9 billion in 2013 sales. Expedia EXPE +1.80%, which in June began accepting the cryptocurrency for hotel bookings, had $4.8 billion in 2013 sales. Overstock, which started taking bitcoin in January, had $1.3 billion in 2013 sales.
Coinbase, one of the major bitcoin payments processors, landed the business. Customers who chose bitcoin as their payment method when on Dell’s website will be sent over to Coinbase’s site to complete the purchase, a fairly common procedure.
Coinbase reached out to Dell a few months ago, according to Adam White, the director of business development and strategy at the company, who worked with Dell on the partnership. “We had some good conversations with them,” he said, and they left it at that. Two weeks ago, Dell got back in touch with Mr. White, and said they’d decided to adopt bitcoin, and wanted to get it done quickly so as to capture sales during the back-to-school season.
Dell got the same terms every merchant gets, Mr. White said, no matter their size: a waiver on any fees for the first $1 million in sales, and a 1% flat fee after that.
Coinbase has about 35,000 merchants using its processing services, and estimates of the total number of merchants using bitcoin is roughly 65,000. Dell is the by far the biggest company, though, in that group.
For Dell, the goal was to find another way to reach customers, according to David Frink. The decision involved a combination of people within the company, he said, including Mr. Dell himself, who was “very interested in moving this along quickly.”
That said, the company understands bitcoin is still in an early stage, and isn’t expecting too much from this. “This is a pilot, and we’ll see how it goes,” Mr. Frink said.
Of Dell’s $57 billion in 2013 sales, $44.7 billion came from hardware, with the rest from the company’s services unit. While the company doesn’t break out exactly how much of its sales come from the website, Mr. Frink said “it’s very considerable,” and say both retail and enterprise products are sold on the portal.
Bitcoin prices have seen a minor increase at midday. While it isn’t completely clear if it’s in reaction to the Dell news, this is exactly the kind of news for which bitcoiners have been waiting: A big, mainstream company announcing it will take the currency as payment.
Bitcoin prices, which traded as low as $616.48 on Friday, were lately around $623.33.
Source "
http://blogs.wsj.com/moneybeat/2014/07/18/dell-begins-accepting-bitcoin-on-its-website/"
