Amazon launches its own currency called Amazon Coins

By on May 13, 2013, 9:39 AM

Amazon has announced that, starting today, users can purchase apps, games and in-app items in the Amazon Appstore and on Kindle Fire using the company's own Amazon Coin currency. To get buyers up and running with the new payment option, the online retailer is giving all existing users 500 coins (valued at $5) free.

So why would anyone want to use Amazon coins to make a purchase? The company says, "Amazon Coins is an easy way to purchase apps and in-app items on Kindle Fire." In addition, it is offering up between 4% and 10% off the price of coins when purchased in bulk as an additional incentive to use their currency.

Currently, the Amazon Coins page shows that $5 worth of coins is selling for $4.50, so even a small quantity saves buyers a little bit of money. The two largest bulk packages, 5,000 ($50) and 10,000 ($100) Coins, are selling at a 10% discount for $45 and $90, respectively.

The main problem for consumers when it comes to Coins (or points on other services) is the issue of leftover money. It's a problem on Xbox Live especially, but it might be less of an issue in this case, as there are actually applications that cost $1 on Amazon's Appstore, and each coin is worth 1 cent.

For app developers, nothing should change with the usage of Amazon coins. They will still receive their standard 70% of the sale price of apps. This is important, as the last thing the company would want to do is change the way its growing app store works and discourage more developers from putting their apps on Kindle Fire devices.

Will you use Amazon Coins? Let us know in the comments section!




User Comments: 17

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1 person liked this | SalaSSin said:

So if I want something worth 50$, I buy 5000 coins for 45$, and use the coins? Count me in.

Skidmarksdeluxe Skidmarksdeluxe said:

If I used Amazon I may use their coins but seeing that I NEVER buy anything online... To me it's moot.

Gopal Bhat Gopal Bhat said:

If I used Amazon I may use their coins but seeing that I NEVER buy anything online... To me it's moot.

Never buy anything online? Seriously?

Do you live in the past or something :P

J/K

dotVezz said:

So if I want something worth 50$, I buy 5000 coins for 45$, and use the coins? Count me in.

Too bad this is only for the App Store (or am I missing something?)

1 person liked this | Timonius Timonius said:

Ugh. Another business launches their own 'currency'. Does anyone else find this just as bad as carrying a thousand rectangular pieces of plastic?

1 person liked this | badicuady said:

It would be nice if we could earn coins if we take surveys or something like this...

Fbarnett Fbarnett said:

Let me see I use a Credit or debit card to buy something.

Now I use the card to buy the coins to buy something?

Just a extra step here just wonder how this benefits amazon

treeski treeski said:

Let me see I use a Credit or debit card to buy something.

Now I use the card to buy the coins to buy something?

Just a extra step here just wonder how this benefits amazon

I think typically the benefit to Amazon is that people buy X number coins for some product, but have a few left over coins after the purchase. Then to make use of the rest of the coins, the user has to buy more. I don't know if that's necessarily how it will work out in this case, though.

Skidmarksdeluxe Skidmarksdeluxe said:

Never buy anything online? Seriously?

Do you live in the past or something :p

J/K

What's that got to do with you?

1 person liked this | MilwaukeeMike said:

What's the point? If I had to guess (just a wild guess..) that there's a tax benefit to selling virtual currency. Is virtual currency exempt from sales tax laws? And I'm guessing you don't have to charge someone tax if they're paying for something in Amazon coins right?

Or maybe it's as simple as Amazon knows they have a few million customers and if everyone uses the coins and has a a buck or two worth of them sitting in their account then Amazon gets to keep that extra little bit of money that people haven't spent yet. So if everyone buys coins and doesn't spend them all they're basically giving Amazon a 0% loan. Good thinking Amazon!

MilwaukeeMike said:

Let me see I use a Credit or debit card to buy something.

Now I use the card to buy the coins to buy something?

Just a extra step here just wonder how this benefits amazon

This is how it works at church festivals and state fairs etc too... but that's to save every vendor the hassle of making change and carrying money. There's also the added benefit of putting security around buying coins, but making spending them easy. Then if your child starts buying games on your tablet, they can't buy more than the coins you have.

insect said:

I wonder if this isn't a way for Amazon to not-charge sales tax now that the new laws have passed Congress. Does an exchange of currency incur a sales tax? Probably not. So now you can exchange your currency from U.S. Dollars (which can be taxed) to Amazon coins (which cannot be taxed) and then buy stuff. I save 10% on the cost of the coin plus don't pay taxes. Amazon can offer the 10% off because they probably estimated that to be the cost of processing the taxes (not to mention that these coins are not based on anything and are completely dependent on a persons faith that Amazon will not fail and take all their coins with them... just like the U.S. Dollar and Us. Gov.).

Ah the loopholes of the world.... at least I think so, since I'm not a tax attorney.

insect said:

Damn it.. MM beat me to it above.

SalaSSin said:

Too bad this is only for the App Store (or am I missing something?)

Dammit, you're right. OK, nothing to see here, carry on.

Tygerstrike said:

Even the govt is not stupid. It is a loophole. The pachincco players in Japan have a similar setup. They play then turn in their "winnings" and get a token of some form. Since gambling is illegal there. They then go around to the back of the building and turn in the tokens for prizes or cash.

So this is a WELL established method of skirting the legal system. However, these ppl in the govt make the laws that others are getting past. If it becomes to much of a issue. The govt will just close that loophole and Amazon will have to find ways around it again. Point to note: Amazon isnt paying its vendors in coins. Eventually this model fails due to improper handeling of RL money. PPl get tired of the extra step. Especially if something goes wrong with a purchase. You could wait up to 2 weeks for resolution.

Ravik Ravik said:

This seems a bit too fishy to me, given the timing of its release and the fact that Amazon crossed over to support the recent bill (which it previuosly opposed). Don't know what (if any) tax ramifications exist for this--maybe an accountant or legal person can speak to this?

@Techspot: Sounds like you have a lead for a follow-up story.

Guest said:

It saves them the per-transaction fees on credit cards when people are incentivized to buy large-value coins (gift cards, essentially). Instead of getting nickel and dimed (and quartered) by the credit card processors on tons of little transactions, they get hit with far fewer and lesser fees.

Xclusiveitalian Xclusiveitalian said:

It seems like a good deal only problem I find is, what's to stop them from saying your now 15,000 coins you paid $100 bucks for are now only worth $20.."deal with it"

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