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Amazon Coins Launching (amazon.com)
204 points by weej on Apr 11, 2013 | hide | past | web | favorite | 162 comments

So I'm trying to work out why?

And off the top of my head it's probably combination of:

1) Helps with micropayments for low value in-app purchases

2) Creates a disconnect between the real cost and perceived cost

The latter helps Amazon create an artificial incentive that they can use to build their store. For example: Buy something physical off amazon.com and earn 100 free Amazon coins to spend on something digital (implicit: with Amazon).

Think back to trips to Disneyland or Disneyworld as a kid. Remember Disney Dollars? Not only were they fun and kid-friendly, creating a distance between real currency and purchases within the park...but they were also redeemable only at Disney parks.

This is the concept behind all loyalty programs, in a nutshell. It's about giving ostensible rewards to loyal customers in an attempt to create what economists call "switching costs," i.e., the degree of hassle involved in moving from one service provider/vendor/business to another. If you've got enough points built up with one provider (e.g., American Airlines), you'll be reluctant to spend money on other providers (Delta, for instance).

Side benefits include increasing customer basket size, increasing purchase frequency, converting customers across categories, and increasing share of wallet per customer.

As loyalty programs go, Amazon Prime has been stellar. It's very costly for the company, and it had Wall Street in a frenzy when it first launched. But it works (and it's also very beneficial to consumers who use it).

I can't say I see the value in this program as much as I do with Amazon Prime, but the logic makes sense.

I.e. it's a lock in trick? One should avoid such things.

It depends on how you define "trick." If you're going into it with eyes wide open, you're using it to derive the benefits, and you've got good self-control, then a loyalty program can be very valuable to you as a consumer.

If you're going into it expecting benefits, and you find yourself getting carried away and overspending, then it's less valuable to you.

I wouldn't call it a trick, so much as I'd call it a loyalty program -- with all the potential risks and rewards that such a term entails. There's nothing necessarily shady or evil about a loyalty program. Indeed, if it makes Amazon a much better consumer experience for you, it can be a win-win.

If it was an option, like you can currently choose to buy Amazon gift cards or enroll in Prime, sure. Even an option with incentives. But if you move towards making proprietary currency the only way to pay in a given area, it seems shady to me. Not illegal-type shady, but has-bad-motives-type shady. These kinds of proprietary currencies are a typically deliberate attempt to reduce the transparency of prices, by adding an addition layer of indirection people have to mentally jump through in order to think accurately about and compare them (you can see that in part in how most such currencies pick weird exchange rates, not decimal ones that would be easier to think about).

But if you move towards making proprietary currency the only way to pay in a given area, it seems shady to me.

Somehow, I doubt Amazon plan to remove the other payment options.

One such example could be the Microsoft Points - perfectly falls under your description. I can never remember the exchange rates, and they deliberately offset the prices so you always have residual points. For example, the minimum points you can buy are 400 ($5) but the cheapest item is 80, then 240, then 360... so you will never be able to spend ALL of them entirely (barring many, many transactions).

An additional twist is to price things in prime numbers so that buying multiples leaves a residual balance.

But isn't every number the sum of two primes?

> buying multiples

Plus there's stuff like using off-by-one values for fractional exchange. Eg 79 points for 99c, or vice versa. If you step to 80p / dollar it's easy to calculate a sufficiently-good approximation mentally, but lots of people aren't used to mental shortcuts like that.

My issue with loyalty programs is that they are used for in-store analytics. I don't like being the focus of analytics sometimes.

You realize that Amazon can already run all the analytics they want when you buy anything from Amazon, right?

Indeed. I wasn't talking about Amazon per se, more discussing loyalty cards in general. For example, I purchase some RayBan sunglasses the other day in Brisbane city, and they asked for a _lot_ of personal details. Far more than were needed for warranty purposes, and the like. I have issues with things like that :)

You can benefit from the lock in. Amazon pays a fortune on my shipping for Amazon Prime. I ordered about 90 times last year, and got 2 day shipping on all of them. It replaces going to the store for many things, so more important to me is the time I saved shopping.

The upside for them is I spent about $4000 on Amazon last year, which is way more than I would otherwise. I don't know if it is good for them, but it sure seems good for me.

I'm 100% with you there. I don't even bother price shopping anymore because I know with Amazon it will be close or better than average big city pricing and I get everything in a time period which seems instant.

I don't know if it's just me, but I noticed that the BEST price is not always on amazon. Most of the time, the retail stores' price is equal to what amazon advertises. Some stores (Costco & Sams) offer items at far below what Amazon offers them for. Most of the time, I only save paying the tax...

Does Costco offer free 2-day shipping? (or free shipping, period?)

If you are comparing an in-store price to the amazon Prime one you have to factor in the costs (implicit and explicit) of actually making a trip out for a particular item or waiting for your monthly Costco run to pick-up X rather than having it here by Saturday.

No Costco offers something similar to 'instant shipping', which means you come, you shop, you leave :)

you forgot the step of waiting in line for 20 minutes after collecting your goods for the privilege of giving them your money.

Also the step where you can buy many more things on amazon than you can at Costco. That said, if you want 300oz of peanut butter Costco may ne the winner there

I prefer to support Newegg when it comes to computer accessories for example because of patent trolls busting, and surely not Amazon who promote DRM. I'd buy on Amazon only as a last resort, if there are no other options.

Do they really? At start yes, I felt like it was good. All items, free shipping. It was really a good deal. But these days I ALWAYS see the same item I'm purchasing, much lower, without prime.


Item A, $100 PRIME

Item A (ie same item..), $80 (no prime available) $8 2d shipping, free super savers shipping.

I'm actually cancelling my prime account because of this. There is none of the last 10 objects i bought over the last 3 month that didn't have this issue.

Amazon can't really avoid doing stuff like this, because their business model (retail) sucks, and makes very little money due to razor thin margins. So they trot out every trick in the book.

> Walmart can't really avoid doing stuff like this, because their business model (retail) sucks, and makes very little money due to razor thin margins. So they trot out every trick in the book.

Wait, no, Walmart avoids things like loyalty card discounts, etc. They also seem to have a decent business model. You're going to have to elaborate a little more.

>Walmart avoids things like loyalty card discounts

Walmart has "walmart cards" and while they don't give you a discount, what you will notice is that if you return something they might resist if you ask for cash back but saying "put it back on my walmart card" will result in a near instant refund in almost any situation.

I always thought it worked for Walmart because they have disgustingly high volume? (And therefore could have razor thin margins.)

And Amazon doesn't have a "disgustingly high volume"...??

I've heard there was some other trick involved in Amazon's profits, that worked precisely because of high volume, and wouldn't work for middle / small size circulation. Something with reinvesting temporary resources during some time slot and etc. But I'm not sure how valid such claim is.

What profits?

Something like this. Let's say Amazon sells 1000 items from some manufacturer. Amazon pays manufacturer with delay (let's say 20 days after they get the merchandise). But Amazon manages to sell this 1000 in 10 days (because they have massive sales scale). In result Amazon has spare money for 10 days until they need to pay. So they have a potential to use them for 10 days. That's what I've heard, I'm not sure how valid this is.

This seems very pertinent to the current thread. Amazon Coins means Amazon gets Customer's money before it is actually used.

In this case, the vendor should just increase their prices to reflect the interest on the credit that they're extending Amazon for those twenty days. This is equivalent to Amazon borrowing from a bank for those 20 days, but perhaps for some reason the creditor's interest rate is lower than the bank's.

Yes, it's equivalent to a loan with no interest rate. Whether vendor has to increase prices or not - that's up to the vendor. I just described how Amazon has a potential to profit from lower than common prices and fast shipping - it increases this loan time window.

Well, Walmart doesn't have razor thin margins. On some things they do (on some things they even lose money) but e.g. toys have a markup of over 40%, for example. That's probably not even the highest margin.

It's possible that Walmart just repects their customers a bit more.

It's a different kind of lock in. Phone lock in is real because the apps I bought on e.g. IOS don't transfer anywhere else. In the case of e.g. frequent flyer miles, that's something they just give me for "free" as part of using their service. That makes the next purchase potentially cheaper so I'll tend to shop with them again. But I could just walk away (and have, in the case of airlines) if I feel the need since this was essentially a gift to me in any case.

Parent's video is a Simpson's clip showing "Itchy and Scratchy money", similar to Disney Dollars.

I think you might have got it -

Lots of bad press about kids spending $1000 of mum's credit card dollars on Google Play Store.

Better to give the kid an Amazon Coin account, like a charge card. Amazon do offer an alternate android ecosystem after all.

Microsoft paid developers to build apps for their new store. They got a bunch of crappy apps meeting minimum requirements.

Amazon created this currency and gives some of it out to users, who can use it to purchase apps for kindle fire. Now Amazon gets to subsidize app development while letting the users decide which apps are worthy.

(This analysis isn't original, it's one I read a month or two ago.)

a month or two ago? Curious, this is the first I've heard of Amazon coins - where was it being talked about so long ago?

Amazon emailed registered app store devs back in February.

If I remembered I'd link it.

Lower fraud risk. Extending the time from credit card charge to goods being delivered lowers the risk of chargebacks.

Store value without storing money for small transactions. Some countries are finicky about storing money, and its a tight balance to avoid being covered by banking laws.

Lowering the barrier for micro-transactions. Customer avoids to repeatedly have to make the decision to spend money, he has spent it once, and now he is just using "virtual credit".

Avoiding cost of processing payments. One processing now covers several purchases.

Dan Ariely mentions these types of products (albeit in the context of cheating): the more removed the product is from real money, the easier it becomes to justify all kinds of actions you normally wouldn't perform: stealing it, spending it, etc.

Paying for content...

You can bet marketers are reading through his books looking for ways to hack consumers.

Or they are reading the same marketing textbooks he is reading.

Yes, and once you've converted the money to Amazon Coins, you've mentally set it aside to spend (sort of like poker chips) and won't think about your purchases as much as you would with real money.

People don't spend real money?

Yes, they do. But when they see the money in front of them, they think long and hard about it. When, however, you introduce all kinds of financial instruments, you are no longer seeing money rather some abstract thing, and THAT makes it easier to rationalize all kinds of actions.

Normally I would agree with both of these because they seem to be the reasons other companies introduce currency schemes. But in this case I think it's telling that Amazon first made the announcement on a blog for app developers. My guess is they are trying to attract developers by guaranteeing them a market.

If you're interested, I wrote about it in IEEE Spectrum when they first announced Amazon Coins in February.


Two reasons are float (they get your money before you use the coins) and breakage (they keep lost and/or forgotten coins).

This is good for cashflow, but depending on the accounting interpretation, it's neutral for the balance sheet.

Subscription schemes and prepayments create offsetting liabilities.

That is:

I give Example Co. $100 now.

They book an increase of $100 in their cash at bank, but they also book an offsetting liability -- services owed -- of $100.

However, from a cashflow perspective, $1 now is always better than $1 later.

I am not an accountant, this is not accounting advice.

I don't think breakage applies, because I doubt they can keep the the lost/forgotten coins, just like unspent gift card money is not kept by the issuer.

Where does the unspent money go, then? Apparently, in some cases in the US, it goes to the state, but not in all cases. See http://blogs.wsj.com/economics/2011/12/24/number-of-the-week...

Best Buy, for example, sets that level at about two years. In fiscal 2011, the electronics company recorded $53 million in income from gift-card “breakage,” or cards that are unlikely ever to be redeemed, up from $43 million a year earlier.

But it does sit in their bank account generating interest until used.

It's more analogous to an indefinite, interest-free loan to Amazon.

Interesting. Per [1] they can't be cashed out or exchanged. So you buy coins, that's the transaction. Amazon is probably then free to do whatever they want with the money. Their only obligation is to later pay out to developers who receive coins as payment. So they're frontloading their earnings. And devs only receive 70% as usual so Amazon gets 30% totally in the clear (no potential future obligations).

[1] http://www.digitaltrends.com/mobile/heads-or-tails-amazon-co...

Is this any different from how Facebook Credits work(ed)?

Someone else will have to answer that, I'm not familiar with them.

Do those rules apply if the balance is not denominated in dollars?

Riot keep the balance of you RP that you paid money for if you don't spend it in League of Legends, would it be different if it were called Riot Coins?

Riot doesn't pay out the coins you spend to other people though. If you buy $1 of an app with these amazon coins, they have to pay the developer their $0.70 (or whatever their cut is). Because of this, the whole income can be realized when the RP is purchased.

I think children are a significant use case. Think of a parent handing off a Kindle Fire to their kid with a set balance of coins. They can buy apps and make in app purchases on their own, without having to worry about the kid going hog wild with a linked credit card or something. Just a guess though.

It's a solution to that problem, but not the best solution (ignoring separate benefits mentioned by other commenters) - the simplest way to avoid kids spending too much is simply to let parents/owners pre-authorise by making a payment and leaving that balance on the account ready to spend, but still in normal currency.

That's pretty much the same thing, as it's merely a method of pre-paying for a finite amount of merchandise.

The actual best solution would be to allow spending controls, so that, even with a linked credit card, the account can only buy $100 worth of product per month or something.

The actual best solution might be to talk to your kids and educate them so they voluntarily don't spend too much ... how innovative and rad is that?

It seems like it might also reduce processing fees to payment processors that charge a flat fee + % of sale. Notably I believe PayPal does this. Here, they would still get their percentage, but would only get one flat-fee for many purchases where before they would have gotten one flat fee for each purchase.

It lets you put money into their ecosystem without being able to take it back out.

It's a series of infinite gift cards, without the inconvenience of having to print physical gift cards.

Also, the earlier they can get money the more it is worth.

On Amazon Payments, the small transaction are more expansive than the bigger one. For example when you pay 0.99$, it's actually 0.893$ = 90.2% (5% + $0.05) but if you pay 20$, it's 19.1287$ = 95.64%. There's 5% more in their pocket.

Also the ability to exchange coins, similar to gift cards.


And conversion of customer behaviour... they could offer Amazon coins as rewards for Marketplace sales knowing that they'll move some customers to future digital offers (I'm thinking the 2nd hand CD, books and DVD markets, but there are others I'm sure).

I've seen a lot of transactions where amazon gift cards are accepted if paypal isn't usable as well.

A HUGE reason for Amazon is to build their own transaction network with control over fee structure, security and implementation.

Why? Helicopter money, as explained in this excellent post by Slate's brilliant Matthew Yglesias:


> So I'm trying to work out why?

Have you checked out the Xbox Marketplace? See "Microsoft Points".

Yes, we've all played XBox.

From the FAQ:

>> Q: Can customers use their Amazon Coins to buy in-game currencies?

>> Yes. Customers will be able to purchase in-game currencies with Amazon Coins.

Good Lord, how many levels of fake money do we have to travel down?

...USD to buy Bitcoins to buy gift cards to buy Amazon coins to buy in-game currency to buy in-game items to build up my virtual character which I sell on ebay for USD to buy Bitcoins...

This is what I heard in my head while reading your comment: http://www.youtube.com/watch?v=8FpCM5cWkNM

And the joy it's all essentially virtual. Not like USD is much more real than the rest.

You ought to 3d print the in-game items and then sell licenses to the files.

tweet version of the comment> "buy BTC to buy gift cards to buy Amazon coins to buy in-game currency to buy in-game items to sell my character on ebay for USD to buy BTC"

The "Apple Dollars" you have in your iTunes account from gift cards are no more "real" than Amazon Coins.

Taking it out of USD and changing the units around (even though it's just dropping a decimal point) mentally disassociates 'Amazon Coins' from USD. Microsoft goes even further on the Xbox, 1 USD (+ local sales tax) buys 80 MSP; so it takes a moment to realize an 800 MSP game is actually $10.

I've seen this many other places. They seem to intentionally choose hard-to-calculate multiples. No one ever sets them at 10 or 100 to the dollar.

They are less abstract. My 8 year old's iTunes balance has a $ in front of it. She understands it.

It is more like a credit balance though, and not a virtual currency. Purposefully, I imagine, to make accounting/taxes more straightforward.

At least it's a (nearly) 1:1 rate.

This seems to be as well, just multiply the USD amount by 100 or divide the Amazon Coin amount by 100.

One big difference that Amazon has with other companies that try and lock people in with virtual currencies - Amazon already has more credit cards on file from customers that trust the service and willingly shop from there than just about any other company in the world.

So I'm sure there's a reason for this, but just because of the sheer number of credit cards they already have on file I'm having a hard time seeing a real rational for this move.

Are they really trying to effectively trick gamers from buying useless game add-ons by divorcing that from its actual monetary cost? Are they betting that heavy hitters on Farmville type games will make this worth their while? That's the only reason I can kind of come up with. If this is the real motive, I'm a bit disappointed because I expect more from Amazon.

It's a marketing tool so they can give out promotional credit.

They've been doing it for years by giving out free MP3/Video credits occasionally.

Is it correct to refer to this as a virtual currency? Isn't this just a sort of prepaid debit system like MS and others use in their own markets?

They are just trying to cash in on that other *coin virtual currency that's been in the news so much recently.

As linked by Lightning this has been in the works for a while now. I don't think bitcoin is their motivation. More likely it's as others pointed out, they get to hold the cash and earn interest/dividends on investments with it until customers spend it. And they can reduce transaction costs because they're handling the transactions, not Paypal/CC/banks.

>this has been in the works for a while now

How long is a while? Bitcoin is in its 5th year of being a thing.

If this functioned similarly that'd be a fair statement. This is being called a currency, but it's really the same as MS Points or any other similar prepaid card. Amazon has the benefit of restricting where the outflow is and so can also ensure 30% of what comes in to buy coins is profit[1], and then make earnings off the rest. And given how constrained the outflow is this is hardly a competitor to bitcoin or any other attempt at a virtual currency. It's a lockin attempt and a play for earlier access to capital. It will probably be successful on both fronts.


[1] Profit is the wrong word, there are other costs involved that will eat away at that 30%. I should have said 30% was guaranteed revenue.

I believe the argument was that the 'name' Amazon Coins is meant to capitalize on things like Bitcoin, Litecoin, PPCoin, NameCoin, FreiCoin, DevCoin, etc.

The function is clearly something more similar to MS Points.

I'm still unconvinced that Amazon has any need to try and take advantage of their current popularity. They have sufficient capital and brand recognition to develop this system without riding the coattails of a still (in mainstream) largely not understood or recognized virtual currency.

Yes, I have no clue what in-game purchases have to do with Bitcoin.

This move essentially splits Amazon off from the Play ecosystem. I mean they already had their own store which people would "invest" in, but adding a currency/gift cards/freebies will only increase the lockdown/isolation further.

I'll leave it up to the reader to decide if this is a good or bad thing but for me: I am skipping Amazon's ecosystem in the foreseeable future and sticking to a more open alternative (namely the Play store, which works on most Android devices - including Fire tablets).

> including Fire tablets

With Amazon starting up with their own store, this may soon be a thing of the past.

Why would they do that in immediate future?

I highly doubt they would, however as soon as their store gains traction, it makes very little sense for Amazon to support a direct competitor on their own branded devices.

I'm not saying its a good or bad thing; it's just how these vendors operate. You don't have itunes on android devices, and you don't have the google play app available on i-devices. You can still use the Play web app on any device, of course.

Technically, they don't support it. People have just figured out how to side-load it and Amazon hasn't done anything to block it.

Exactly. So perhaps Amazon might begin to block it in the future. I don't really see that happening soon, however. Amazon hasn't built up enough critical mass to ditch the larger Android ecosystem.

It weird that amazon would move in this direction to split up their customer base onto different forms of currency.

Microsoft is rumored to be tearing down their XBox points system so that there is less fragmentation in payment across their product lines.

By far the most aggravating aspect of MS Points are that its not a 1:1 conversion rate. I don't think there's anything inherently 'bad' about an internal payment currency (beyond the fact that consumers generally dislike it.)

See, you're considering this from a US-centric view. There are lots of currencies, so there's no single 1:1 conversion rate.

Touche -- that's a good point.

This seems like a clear cut way to get developers to develop or port over their current apps to Amazon's app store.

"Sign-up to be a developer for Kindle Fire and submit your apps by April 25th to ensure we have time to review them before millions of dollars in Amazon coins arrive in customers’ accounts."

The call to action basically says: We are flooding the market with free money which developers are going to get 70% of.

At least it's 1 coin = $0.01 USD. Far better than Microsofts "Points" where it's I think 79 points = $0.99 USD. This makes it really hard to figure out the actual cost of something listed, for example, 600 points. It also makes things seem cheaper than they really are.

>When Amazon Coins launches in May, we will give out tens of millions of dollars in Amazon Coins to customers to spend on Kindle Fire apps, games, or in-app items.

For a split second I thought, "is this a new way for Amazon to spend their free cash flow to the point where their profits approach zero?" but then I realized that this is only for digital purchases so they aren't actually spending money per se and the hit to their actual top line will be a small fraction of the total giveaway (esp. since these coins can't be used on kindle books it seems)

If a consumer purchases something then wouldn't Amazon be losing 70% of that as they have to pay the developer of the app the consumer made the purchase on/for?

given their history with paying developers that are the app of the day on their store[1], I can see them finding a loophole to avoid paying devs who collect payments with coins.

[1] http://blog.shiftyjelly.com/2011/08/02/amazon-app-store-rott...

As of now, they are claiming they will be paying out exactly the same as if your app was purchased with dollars.

It seems like that's a major part of this push - if you want to receive any of these free Amazon dollars, submit to the app store.


The point remains; I still have very little faith in Amazon's android adventures given their shady history.

This is sort of a very different situation - whether or not you agree that their offer to be featured as the free app of the day is valuable, they were upfront that the rev-share in that situation is 0% when they make the offer.

In this situation they are claiming that it's exactly the same as cash to developers - that is, you will receive 70% of the purchase price. I have absolutely no reason to believe that they're attempting to mislead or be dishonest.

What shady history is that?

They can probably only spend them at the company store.

Yes, but 1) not every coin is likely to actually get redeemed, and 2) the total loss they incur is more or less a controlled marketing investment in order to jump-start user familiarity with the coin program anyway.

Whoops, complete oversight on my part. Thanks for catching that!

Are they trying to capitalize on current Bitcoin hype on the mainstream?

This isn't a crypto-currency, only a virtual currency with a single vendor.

Not quite a BTC competitor in any sense yet.

It's not a currency at all, they're prepaid gift cards without the card.

Maybe, and why not? Let's face it, Amazon would coins make a lot more sense for most people than Bitcoin would. There's also the possibility that they're moving to undermine Paypal; Amazon and eBay have been at odds on Capital hill over sales tax policy.

Bitcoin isn't just a currency, it's also a major and reliable international transaction network.

How can a 'new virtual currency' be US residents only?

This is more akin to Disney Dollars, than it is to an actual currency which has controls, an exchange rate, international trade etc.

It seems like it's just a way for Amazon to avoid paying transaction fees on real money. With their margins, this could make sense and be a worthwhile endeavor.

I can see Amazon using this kind of thing to differentiate better between "real" credit and promotional credit. Like, if I have Prime, and I choose to take a slower shipment time, I can get $1 for MP3 downloads. But that is not the same as if I just had a $1 credit on my Amazon account... it's much less useful. Amazon could make that $1 promotion be a 100 AZC, and it would be a lot more clear.

At first glance this appears to be a virtual currency along the likes of Bitcoin but then you actually read what Amazon Coins actually is and it's merely a points system along the likes Microsoft Points merely capitalising on the whole Bitcoin virtual currency craze. The fact that it's US only for the moment is another limiting factor, not really that impressive once you break this thing down.

How about fuck no? The whole point of bitcoin is that it's decentralised and you own your coins. This is basically just Zynga.

This has nothing to do with Bitcoin, obviously.

It, like Bitcoin, is a virtual currency.

Dammit - I read this and thought it was branded bitcoins!

Which reminds me - is there any cryptographic reason this cannot be done ?

There are all sorts of off-brand "bit-coins" already. Litecoins are hoisted on certain forums quite regularly.

The 'why' is the same reason Xbox points exist. Because it makes the company more money than dealing with micro transactions. Amazon saw Bitcoin's success and tried to use its popularity to name this a virtual currency. Except they failed in the very first sentence, where they start with 'US only'.

Coin has been used to describe currency for far longer than Bitcoin has been around...

A US-only virtual currency to buy stuff from a single US merchant seems pretty pointless. Why not just do the Apple trick and aggregate credit card purchases?

Virtual currency sort of makes sense for marginalized communities (unbanked, children, illegals, etc.), but really only makes sense for international.

If I never heard of Amazon before and then saw this page, I'd think it was a scam without ever looking back. It looks like another Get Rich Quick-scheme with the obvious gold "Tens of millions of dollars" as first words on the page. That text color also has a goldish tint.

Um.... Amazon Vouchers then.

What an vacuous way to market them. I'm having a hard time believing this is anything other than an attempt to hitch a ride on bitcoin's wagon, aimed at exploiting the little bits of info that the uninformed know and/or have heard about "digital coins".

It seems like an attempt to convert developers from Play to Amazon Appstore. The $10M seed money will encourage a land rush (or at least they hope).

If it doesn't work out it will be easy enough to phase out the program by converting bought coins back to a store-credit.

"... a new virtual currency ..."

It doesn't seem that way to me. It's more like a bus token since you can only spend it in certain venues. Or a coupon if you can redeem it for cash. At best, it's a virtual bank account.

Bus tokens and coupons are also virtual currencies. As a merchant, you're free to accept payment in bus tokens, if you like. http://en.wikipedia.org/wiki/Scrip

Every currency or instrument of value can only be spent in certain venues. Try spending USD in a small French village, for example.

So XBOX is to Kindle Fire as Microsoft Points are to Amazon Coins?

I wonder if they'll let you transfer coins to other people easily.

I wonder if one has to pay sales taxes on amazon coins. If not, then they have a successful way around that little nuisance.

>You will get paid the same 70% revenue share

Guess it sounds better than 'We will take a 30% cut of everything you sell!'

What's the exchange rate with Flooz?

Amazon is killing it. Any chance they'll become a direct competitor to bitcoin anytime soon!?


Those coin renderings look a lot like Bitcoin. Thanks for adding to the confusion, Amazon.

Those coin renderings look a lot like coins.

Makes me nostalgic for Canadian Tire money...

Brilliant. Is this goodbye for BitCoins?

Bitcoin envy.

Is this the successor to BitCoins?

I read "Amazing Coins Launching"

Sorry this comment adds no value ;-)

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