There are over 4 trillion paper documents in the U.S. alone and they are growing at a rate of 22% per year. Nearly three-fourths of young children within the U.S. participate in a preschool program, but that doesn’t mean that high-quality schools are always the most financially feasible for many parents. In an effort to provide more flexibility and keep their own costs down, the Montessori Schools in Flatiron and SoHo have taken a rather unconventional approach: they’ll no longer accept credit card payments for tuition payments, but they will accept bitcoin.
The bitcoin is a relatively new type of currency. Created in 2009 by an individual using the alias Satoshi Nakamoto, the currency doesn’t require middle men and can be used to purchase merchandise anonymously. Because they are not regulated or tied to any one country, international payments are simpler and there are no direct fees involved. Bitcoins are also easy to send digitally and can be stored in a digital wallet. These days, they can be used to buy all types of merchandise, but using them for educational purposes is a pretty cutting-edge idea.
In an interview with Business Insider, Marco Ciocca, the co-founder and chairman of the schools, explained, “I just really noticed that a lot of forward-thinking businesses were starting to accept [bitcoin]. The more I looked into it in terms of ease of payment, low fees, speed of transactions — and I went to a couple of conferences and spoke to some of the developers to… learn the upside and… the negatives of accepting it… You know, it sounded like something that really fit in with our philosophy at the school.”
Ciocca told Business Insider that a handful of parents had asked whether the school accepted bitcoin before they implemented the change. The cost-saving possibilities and the potential demand for bitcoin acceptance prompted the administration to make the switch.
The school uses a third-party system that instantly changes the bitcoin payments to U.S. dollars and then transfers it immediately into the school’s bank account. There’s a 1% transaction fee for using that service, but Ciocca says that’s preferable to credit card processing fees, which can range from 2% to 4%, depending on the situation. In addition, Ciocca says that when credit cards get declined, more fees are tacked on and it becomes an inconvenience to charge these individuals a second time.
As a result, the schools no longer accept credit card payments, but they do accept cash, check, and money wires in addition to bitcoin. Ciocca reported that a number of parents chose to pay in bitcoin, including those who have businesses based on Blockchain (a software platform for digital assets like bitcoin).
It may seem like a novelty at first, but the growing popularity of this alternate currency shows that it’s not merely a phase. And for New York City parents, this new setup could be a way to use the bitcoins that are burning a hole in their digital wallets.