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Amazon Coins Will Be A Welcome Disruption To Android Developers (forbes.com/sites/ewanspence)
27 points by eplanit on Feb 6, 2013 | hide | past | favorite | 31 comments

Here's the Google Play developer agreement:


They changed the wording to be less clear, but I'm pretty sure you're only supposed to use Google Wallet to collect payments. Even if the new language doesn't state this as clearly as it used to, I'm sure they can go back to the old language at a moment's notice if Amazon starts undercutting their payment infrastructure (and the 30% it nets them).

Amazon has its own app store so they are probably hopeful that even if google doesn't allow this the devs will push out a second version which accepts the coins. Amazon is selling a lot of Kindle Fire devices that don't hook into the google ecosystem at all.

I don't see how this is very disruptive. What are the benefits of proprietary currency? That is, other than locking in your users to spending their money only on your marketplace?

Not only locking in your users but abstracting cost away. Consumers are very sensitive to price changes to a product, e.g., Games are $0.99 now but $1.05 a week later and $1.07 a month later, they will notice and possibly stop buying or at least make less purchases. But if 100 amazon coins is $1 then $1.05 the $1.07 but Angry Birds is being advertised as 99 amazon coins the entire time then people are less likely to be put off from the sale.

Isn't that bad for your users though? I would feel taken advantage of if I learned that while the cost of a game has remained the same (99 tokens) but the cost per token has gone up.

It's a pretty tried and true system... packaging is a similar game reduce the size of the product, but keep the same packaging size while keeping the same price. You can definitely take it too far but on the whole consumers are much more tolerant to these types of changes, most aren't even really that aware.

How long until Amazon does Prime Instant Apps, where you pay one flat fee and get unlimited access to all of the apps in their (limited) catalog?

Please, why does everyone have to make up their own currency? I'm perfectly content with using dollars. Facebook Credits, Microsoft Points, etc... how do these do anything but confuse and corner the consumer?

Edit: Yes, I realize you're still able to use credit cards. For now. :)

Off the top of my head:

You get to make money on the float (money given, virtual currency not spent yet). You can let others sell them (eg the iTunes cards in stores) as the stores would otherwise have no incentive to sell or promote your points. You can avoid tax issues since the conversion of money into points is when it matters, not later on. You get user identity information so you can market at them. You can start offering other products (eg stickers and toys). You can get participation by people without credit cards. You can do micro transactions - credit card fees kill them normally.

All great points for how this benefits Amazon, but not the consumer. It just locks up your money in their ecosystem.

Well for a start the system has to work this way to be practical. If there was a credit card transaction for every coin use then the minimums would have to be a lot higher in order to take into account processing fees. You can't sell something for 20c paid by credit card. Even a sale for $1 eats up a fair bit in processing fees. But converting $20 into "coins" then allows the coin based transactions to be for far smaller amounts (eg equivalent to 10c).

Obviously Amazon and other virtual currency providers need to give you a good reason to get sucked in. They are largely successful. One approach that seems to work is paying to save time. eg when playing a game you can unlock various items and make progress just by playing the game for quite a while. Or you can do a transaction to accelerate that such as getting an item immediately or unlocking levels.

Americans also have a tendency to prefer fixed known in advance costs over variable ones. Note for example how telephone service has been that way. If you buy $20 worth of coins then you know you can never spend more than $20. On the other hand if your credit card is on file and used in every transaction then you could end up being dinged for far more than you expected.

> You can get participation by people without credit cards.

I think this part is aimed at kids.

A Gallup poll claims 7% of people in developing economies have credit cards and 50% in high income countries http://www.gallup.com/poll/154340/credit-cards-formal-loans-...

According to creditcards.com (I can't tell how legit they are) 70% of US adults do have a credit card.

There is a sizeable market of non-credit card holders. And yes, it also lets parents buy virtual currency for their kids too.

How are you buying Amazon Coins without a credit card? At the store with cash? Amazon already sells gift cards at retail locations.

It is easier to purchase $20 worth of "coins" once than it is to make small dollar purchases in dribs and drabs over time as small transactions are needed (eg 40 transactions for 50c each).

"coin" purchases can be done in any way that makes sense for a consumer including using credit cards, debit cards, bought at stores, gift cards, promotions from others (like how many places use airline miles) etc.

While I agree that they're annoying, they solve the problem of local currencies. I don't have an intuitive grasp of how much a dollar is, nor do I want to.

Sorry, I didn't mean to imply dollars specifically for everybody. Local currency can easily be displayed for everyone without made up coins.

It gets complicated if you don't always stay in the same country. What if you topped up £10, used £7.29 of it, then went to the US and topped up $10? Should your balance be £2.71 + $10? Which currency should be used when you buy things? How should conversion be done?

I understand the motivation of wanting a separate currency.

The only real information in the entire article:

"Amazon have announced a virtual currency for their Android App Store, [...] targeted at buying applications. [...] Amazon Coins is a one way street, to ‘load up’ an account that can be used to buy applications in the Amazon App Store."

The rest is just the author's wishlist.

This would be really cool if you could do something like contribute to AWS and make e-coins to then contribute to the marketplace. Obviously this is probably technically infeasible for most types of work that AWS does on a daily basis.

I think this is classic monetary policy to stimulate an economy. They're going to greatly expand the money supply. Producers will respond to the assumption that consumers will be flushed with additional currency to expand production to meet that demand. So Amazon is playing Central Bank to its own economy in essence and trying to increase production. In this case that extra production will draw in additional consumers and they can step out having primed the pump initially but hopefully having left a positive cycle.

How is doing the same thing others have been doing for years disruptive?

Amazon does have more experience working with customers. Hopefully this really pushes Android app purchase to the next level.

I don't think Amazon in general is a welcome force in the Android world and I doubt many people enjoy submitting apps to both Google Play and Amazon. They are contributing to fragmentation of the platform.

I think the opposite is actually true. Competition has forced Google to step up it's game lest Samsung et al replace their ecosystem with Amazon's.

I agree that Android is an evolving comedy.

I'm spending a constant dribble of money on the ridiculously small, crappy and unfriendly Amazon marketplace and not a single cent on Google Play because it does not accept my money. There's about 100 - 200 EUR worth of applications on Play (that are not on Amazon) that I would immediately buy once Play accepts PayPal.

I don't understand why PayPal should be a standard. I'm kind of the opposite of you, as requiring payments through PayPal annoys me greatly.

I don't want PayPal to be their standard provider; I merely want the option to use PayPal.

In the EU, PayPal is now forced to behave like a real bank, so maybe the hate PayPal gets is mostly justified for the US market.

"Google Play gift cards are available in the United States in the amounts of $10, $15, $25 and $50". I'd like to see Google gift cards world wide (like Apple). No way I'm providing my credit card data to that Wild West store.

Sounds like another step towards a walled garden.

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