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Old 02-08-2013, 01:18 PM   #23
twobits
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Posts: 223
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Join Date: Oct 2010
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Quote:
Originally Posted by FizzyWater View Post
Is this a way around the "no discounts" rules on things? How is this different from "Gift Certificate"?
Doubt it has anything to do with no discounts.

It is more like tokens at the arcade or chips at the casino. Part of the idea is to put things in a different form that is not thought of as much as money as much as national currencies are. I am a bit surprised for this reason they did a mapping to the cent instead of say the dime. It also puts things in a form with lower friction costs and reporting regulations then national currencies.
In this case the goal seems to lower the costs of micro transactions. In an app you may want to sell a level or chips for a card game etc, however to sell them using paypal or a credit card, they will take something like .30 + a percentage. This makes selling anything less then .35 or so an instant lose, not even counting any costs you may have to process it. So, the idea is that Amazon, with its higher clout to have negotiated better processing rates, along with the aggregation of the purchases across more then one app, can lower the costs and allow much smaller transactions to be feasible. It also of course puts them into a position to get traffic to be able to cross sell to and take a percentage of the action if they want.
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