Amazon’s most recent Kindle Fire marketing effort is the introduction of Amazon Coins. They’ve released their own digital currency that can be used to purchase apps and games from the Amazon Appstore. On the surface it’s a confusing move, given the larger trend of companies moving away from internally controlled currencies, but there’s a lot to be said for the idea if it is handled correctly.
Most users should already have received the email informing them that 500 Amazon Coins have been added to their account. That will hopefully give people a chance to get interested in the idea. This will not be blocking off real currency-based purchases, of course. That’s going to be an important consideration, since systems that completely replace all other forms of money with their own tend to enjoy little enthusiasm. One mistake easily avoided. Even Microsoft has been forced to begin removing their digital currency thanks to that approach despite a large and dedicated user base.
Most likely, the goal here is twofold: Encourage more frequent spending and allow for more options where children are concerned. The addition of an alternate currency model that can be used for these tasks makes perfect sense so long as they are not forced on the customer without their input.
Consider the potential for the Amazon Coin as a micro-transaction currency. Rather than needing to enter a password for every payment, a customer can purchase 100 coins for a dollar and spend them at their leisure with no hassle. Abuse is limited since there is a hard limit to how much of the currency is present at any given time. Annoying lists including dozens of $0.05-0.10 transactions are removed from statements. Customers even feel more free to make the occasional transaction they might otherwise have avoided, since the Coins are already sitting there.
When it comes to children, this has the additional benefit of security. Nobody wants a repeat of the early iPad problems that resulted in thousands of dollars worth of purchases being made by those too young to grasp what they were doing, but at the same time parents often want to be able to allow free use of the devices. By setting up a separate wallet for this sort of thing, Amazon could allow these parents to offer an allowance of sorts that doesn’t require regular input of a password or PIN.
Amazon is known for offering frequent promotions with purchases. This will certainly continue to be the case. While the occasional free MP3 or video credit might be beneficial for some and overlooked for others, it’s going to be easier to encourage people to make use of these freebies if they have a wallet to fill up with Amazon Coins. This will encourage app purchasing and use while giving developers even more incentive to join the platform. Considering the fact that Amazon’s Appstore for Android already shows superior returns when compared to the Google Play app store, it’s only going to get harder for anybody to justify staying away.