Banking, finance, and taxes
Amazon Coins Expands Its Bitcoin Rivalry Ambitions
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Amazon.com Inc. (NASDAQ: AMZN) is starting to make its Amazon Coins program available to mobile users. The move probably reflects a realization by the company that making the program available only to users of its Kindle Fire tablets is limiting the growth of its Amazon App store.
The move may also allow Amazon to get ahead of the spread of Bitcoin and to keep more of its customer activity within Amazon’s own financial ecosystem.
The company said Wednesday that customers in the United States, the United Kingdom and Germany can buy, spend and earn Amazon Coins on Android-based phones and tablets. Virtual coins can then be used to buy apps, games and in-app items. In short, this is allowing micropayments and larger payments alike inside the Amazon ecosystem.
The expansion does not make the coins available to users of iPhones, iPads, Windows phones and tablets or other platforms (not yet).
Customers cannot use Amazon Coins to buy other products and services from the online retailer. But users have told the company they would like to use Amazon Coins to buy more than games and apps. So, it is possible the program will be expanded.
Amazon calls Amazon Coins a “virtual currency,” but the program, introduced in May 2013, operates more like other digital gift cards available from retailers. Amazon Coins theoretically are also not discounted over regular dollars, so one Amazon coin is worth one cent. But Amazon’s site on Wednesday offered 500 Amazon coins for $4.80, a 4% discount.
A customer buys the coins from Amazon’s App store. Developers of games and apps for Amazon’s App store get paid in real money.
It has yet to be revealed how much volume Amazon Coins is generating. The program was not mentioned in the company’s fourth-quarter earnings report.
Is this a coincidence on the timing of the Bitcoin woes? Maybe, but Amazon Coins has been an ongoing effort for some time now. Still, the Mt.Gox exchange has seen the value of Bitcoin fall from $1,000 in January to around $261 on Tuesday. BitStamp shows the “real” Bitcoin price up around $625 on last look.
Amazon shares were down 0.9% to $350.39 in early Wednesday trading.
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