Many individuals are hesitant to use alternative currencies, due to their relatively recent entry to the marketplace and instability. A new report from Mercator Advisory Group detailed that companies may not want to put away their cash counters and coin sorting machines just yet, as these currencies are likely experiencing a slow demise and customers who have started to use them will soon go back to traditional forms of payment.
Many companies turn away from digital currency
Some enterprises that have launched alternative currencies are already abandoning the initiative, as little consumer interest rendered their endeavors ineffective. The report noted that both Facebook and Microsoft have announced they would eliminate their virtual currencies.
Despite the failure of Facebook Coins and Microsoft Points, some companies still think alternative currencies are an option worth exploring. However, their attempts could be misguided and not end much differently than other virtual money. Amazon recently began issuing Amazon Coins as its own form of currency, a decision some experts think the company will need to go back on in the future. While executives did make the decision to peg this new currency to the U.S. dollar - unlike Microsoft Points, which called for users to complete their own conversion calculations - and even gave some users free Coins upon the launch, virtual money just hasn't caught on with consumers.
In fact, the Mercator report predicts shoppers will reject Amazon Coins. Adding another step to the purchasing process may prove too much for consumers, who are expected to respond by not utilizing the coins.
"They're too complex for the purpose they're addressing," said Jeffrey Green, director of the emerging technologies advisory services at Mercator, according to Coin Desk. "I have a feeling that over time, Amazon may need to follow suit with what Facebook and Microsoft are doing with their own coins."
With shoppers hesitant about using online money and some of the most well-known digital currencies failing, business owners may notice a spike in traditional forms of payment. While consumers were previously able to purchase games with their Microsoft Points, they may now need to turn to paper currency to complete a transaction. If Amazon Coins fare similarly, this could cause business owners to utilize their cash counting machines frequently as they cope with more in-store purchases.
June 21, 2013