Amazon Coins are a new type of virtual currency developed by the Internet retailer. They will launch in May, in the U.S. only at first.
As with Google's Play Store, current purchasers have to link a credit card with their account -- an Amazon.com one in the case of the Amazon Appstore, naturally -- but after May, they will be able to buy Amazon Coins and use those instead.
It might be hard to understand why folks might want to use Amazon Coins instead of cash, when they map one-for-one. One Coin costs one penny. There are a few reasons that come to mind, though, not all of them pro-consumer.
- Users can buy Coins and limit Amazon Appstore purchases to Coins, which means their kids can make limited purchases.
- Coins work like gift cards. It snares the user into buying from Amazon.com, as the Coins are pre-purchased and can only be used at the Appstore.
- Amazon.com gets free use of your funds until you use the Coins. They get to make interest off the funds.
The press release emphasizes the Kindle Fire, and doesn't mention standard Android devices. However, the FAQ indicates that apps that support both Android and Kindle Fire can be purchased with Coins. That makes it sounds that if for some reason the app won't work on the Kindle Fire, Coins won't be allowed as a currency.
Developers will get their standard 70 percent revenue cut.
As a perk for the new program, Amazon.com said that in May, when the program begins, the company will give customers tens of millions of dollars’ worth of free Amazon Coins to spend on apps. That alone could jump start the program.