Amazon has expanded the availability of their digital currency, Amazon Coins, from just on their Kindle readers. Amazon Coins will soon be available on all Android devices in the US, UK and Germany, who will be able to buy, spend and earn using the virtual currency. Amazon Coins can be used to purchase apps, games and in-app items from the Amazon’s store. 

Mike George, VP, Amazon Appstore and Games, claims that the firm has been amazed by the number of people using Coins on the Kindle Fire. "Because customers can earn Coins when they buy apps in Amazon's Appstore, and because they can buy Coins themselves at up to a 10% discount, customers love the extra value they get," adds George.

Who next?

To make it in payment systems and make sense to large merchants, you have to be like Amazon: big and global. The only organisations that qualify are eBay with PayPal, Apple, Visa and MasterCard, facebook and China’s Alibaba e-commerce network:

• eBay/PayPal are likely to launch their own virtual currency as it has filed a patent application proposing secure tokens that could potentially be used as a virtual currency.
• Apple, who probably now has over 530 million iTune accounts (they are adding 500k every day) most with a registered payment card, have not announced any plans (YET) to develop a digital currency, but they will when have sorted how they are going to dominate in-store purchasing
• Visa and MasterCard have plans, but whether the banks will let them is uncertain
• facebook have tried once and gave up, but they will try again because digital currencies will be huge and very profitable, eventually
• Alibaba’s payment service Alipay setup in 2004 is China’s biggest third party payment service, and they too will need a digital currency to compete.

Ii is pretty clear that eBay will be the next digital currency to announce and that, in the long run, corporate treasurers will have 5-6 digital currencies as well as Bitcoin to choose from for their payments on the web.

The new questions

For in bricks and mortar stores and for most on-line payments corporate treasurers would just be interested in how many people use the system, what are the charges, and will we loose any business if we do not provide that payment option. With digital currencies several new questions need to be asked: 1) do you trust the currency’s owner?, 2) do you want to do business with the currency’s owner?, 3) does the currency have a stable value, e.g. Bitcoin lost 14% of its value in January 2014?, 4) is the currency’s business model acceptable to you?, etc.

The problem is that digital currencies are going to be huge, eventually. How will you choose which payment systems to accept?