amazon coin

From Facebook Credits to Nintendo Points to Bitcoins, everyone loves a good digital currency. And coming in May, Amazon will be the latest to join the fray. The online retailer has announced its plans to roll out “Amazon Coins,” which will be used for Kindle Fire owners to purchase games, apps, content, and in-app purchases on their tablets.

Amazon is currently touting the new service to mobile developers, encouraging them to make sure their apps support the new payment method by April 25.

Any purchases made via Amazon Coins will still give developers the same royalty payments as if the user paid with a credit card. And unlike some digital currencies that have confusing conversion rates (cough, Microsoft Points, cough), one Amazon Coin will equal one penny.

In order to introduce people to the digital payment method and hopefully lure them into a state of Amazon Coin addiction, Amazon will be offering tens of millions of dollars in free coinage to Kindle Fire customers. The official press release did not specify exactly who would be entitled to the initial free giveaway and how much each user will receive.

Keeping customers coming back for Amazon Coins will be an interesting proposition. After all, Amazon already has multiple ways to pay — retail store gift cards, digital gifting, etc. Offering a payment option that has a more limited scope is a tricky sell. Amazon will likely continue to offer special promotions and offers to get customer dollars locked in to high-margin digital content as opposed to physical products on Amazon.com.

The second takeaway from this news is that it further cements Amazon as its own tablet entity, highly segregated from the rest of the Android community. The fact that the Kindle Fire brand is going to have its own payment ecosystem shows just how much power Amazon holds in the market.