Amazon Introduces Digital Payment Method – Set For May Launch

In May this year, Amazon will roll out its own virtual currency for purchasing applications, games, and in-app content on Kindle Fire in the U.S.

Under the designation of Amazon Coins, the company has added this innovation to its product range as what Amazon considers an easy way for Kindle Fire customers to spend money in the Amazon Appstore, offering app and game developers another substantial opportunity to drive traffic, downloads and increase monetization. To generate initial business and make an impact with users, the company will hand out “tens of millions of dollars in Amazon Coins” for free.

Application developers will get their standard 70 percent revenue cut on content purchased with Amazon Coins.

Not to be confused with Bitcoin , Amazon is not creating its own decentralized digital currency (yet). Amazon Coins appears to be a method for Amazon to promote Kindle Fire games and generate customer interest in free trials.

The company has recently launched a number of other features for game developers, including in-app purchases of physical goods. For now Amazon Coins can only be redeemed for Kindle Fire apps and games, although one of the frequently asked questions detailed on the website states that “apps and games that are available for sale on both Android and Kindle Fire will also be purchasable with Amazon Coins.”

Amazon Coins are also not discounted over standard dollars. One Amazon Coin is worth one cent, so if an app costs $2.99 it will cost 299 Amazon Coins.

It has not yet been confirmed as to which method Amazon will use to sell the coins to customers subsequent to the end of their free giveaway period, however it is likely that this will be via a process with ergonomics as a main factor.

Amazon Appstore developers will earn their standard 70 percent revenue share when customers make purchases using Amazon Coins. Developers with apps and games currently in the Amazon Appstore for the U.S. don’t need to do anything with their apps to capitalize on this new opportunity. Amazon advises developers who are not yet in the Amazon Appstore to submit their applications soon, as only applicationss submitted and approved by April 25 will be ready when Kindle Fire customers have Amazon Coins to spend across the Amazon Appstore.

“Developers continue to report higher conversion rates on Amazon compared to other platforms,” said Paul Ryder, Vice President of Apps and Games for Amazon. “Now we have another new way to help developers reach even more of our millions of customers. Amazon Coins gives customers an easy way to spend money on developers’ apps on Kindle Fire in the Amazon Appstore—and we’re giving customers tens of millions of dollars in Amazon Coins to get started. Developers who aren’t yet in the Amazon Appstore will want to make sure their apps have been submitted and approved by April 25 so they’re ready for customers to start spending their Amazon Coins.”

"We've already found that the average revenue per user on Amazon is higher than other Android platforms," said Keith Shepherd, CEO of Imangi Studios. "We're very excited about the monetization opportunity with Amazon's new virtual currency."

"Everyone recognizes Amazon's success in the e-commerce world – now the Amazon Appstore has become a major player in the mobile app marketplace," said Misha Lyalin, ZeptoLab's CEO. "Amazon's new virtual currency is designed to open new opportunities for developers and make things easier for customers. This is a great example of appstore innovation and we want to support it."

"We've been extremely pleased with how well our games monetize on Amazon," said Michael Grobe, Chief Financial Officer of GameCircus. "We're very excited about the launch of Amazon's new virtual currency."

Amazon Coins is the latest in a series of new features and services for developers that make Amazon the most complete end-to-end ecosystem for building, monetizing and marketing their apps and games. Recent announcements include:

• In-App Purchasing for Mac, PC and web-based games, enabling developers to let customers use their Amazon accounts to purchase virtual goods and currencies from games on those platforms

• Game Circle, which includes capabilities like Achievements, Leaderboards, Friends, and Whispersync for syncing games across devices, and Leads to better engagement with games

• Game Connect, which lets developers marry the ease and security of shopping on Amazon with the convenience of having virtual goods delivered directly to customers' game accounts

• A/B Testing, a service that helps developers improve app functionality, retain customers and increase monetization

• Adobe AIR Native Extensions, which makes it simple for Adobe Flash developers to add In-App Purchasing and Game Circle features to their apps and games

• Amazon Mobile App SDK (System Developers Kit) Eclipse Plugin beta allows developers to rapidly and reliably integrate Amazon APIs into their Android projects, speeding up development and cutting down on project setup time