Amazon Coins: E-commerce giant creates virtual currency

Amazon.com, the company that reshaped how we spend our money online, wants to do it again on its own terms.

The company this morning announced its own virtual currency called Amazon Coins — jumping into the world of online credits by giving its customers a new way to buy apps, games and in-app items starting with its Kindle Fire tablet. The company says it will give consumers “tens of millions of dollars’ worth” of free Amazon Coins when it launches the virtual currency in May.

The move promises to put Amazon in more direct competition with the likes of Facebook, which has its own Facebook Credits virtual currency with similar characteristics.

Amazon says in an FAQ for developers that Amazon Coins will be worth one cent each, so an app that costs 299 Amazon Coins, for example, will be the equivalent of $2.99. Developers will get a standard 70 percent revenue share, and will receive their payments in U.S. dollars. Amazon assures developers in the FAQ that the virtual currency won’t change how they’re paid.

The program will launch in the U.S. only at first, and Amazon says customers won’t be able to buy subscriptions with the virtual currency.

  • http://twitter.com/puckyourself Joe McGrath

    Even though they reduced credit card transaction fees by requiring a purchase in bulk, and created one currency worldwide to facilitate sales globally more easily, I seem to remember you being rather negative on Xbox Live (or Microsoft) points. How do these differ to the extent they are better? What differs in these that “reshapes how we spend our money online”

    • http://geekwire.com Todd Bishop

      You’re right — one of the reasons I don’t like Microsoft Points overall is that it’s not a simple conversion to real currency, and the system ends up masking the real cost of things as a result. I realize that’s a function of the global reach of Microsoft Points, in part, which I agree has its merits.

      Amazon is U.S. only for now, but Amazon’s use of the penny a point model is at least more straightforward.

  • http://twitter.com/Vroo Vroo (Bruce Leban)

    This article and Amazon’s press release are missing one key detail: what are the advantages of Amazon coins – if any – over real money?

    For consumers, I can’t spend my Amazon coins anywhere but Amazon, which doesn’t seem like an advantage.

    For developers, I get paid the same with a-coins and real money, so why would I care?

  • Cody ChesnuTT

    Another step, along with providing financing to suppliers, toward Amazon becoming a bank.