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Yep, I did that - but they have three cons Im not fond of:

1) More costly (not by much but still)
2) Only come in one flavor - as in - they could only be gold or platinum.
3) They don't look as nice (my personal opinion of course).

Having said that, utilizing those as opposed to doing in-game conversion rates will only get so far - you'd cut down costs, but ultimately not enough to make me want to use them =)

If you stray too far and go for a 1000-point conversion (or use the new packs that actually have a 1000-chit in them) you would end up handing out very few coins, which isnt exactly epic. Of course, you could mix in change, but then you get into the whole "then I need to buy the change" scenario.

Its tough - because on the one hand you have the game in which items worth tens of thousands of gold are not THAT uncommon and on the other hand reality, where the equivalent of one chit costs around 0.5 USD, so if you want to average that out, even with a 100 value PP, you would end up having to pay hundreds of dollars (even thousands if you really wanted to dedicate enough resources to it) to cover a long-lasting campaign.

That said - the prices I listed above are for the campaign coins only, and adding in one of these packs: http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8g5a

could certainly help, but the bigger numbers you hand out, the more you need to fill in the space between those numbers (as in: you would need change for a 1000-chit if someone decides to buy something worth 334 gold).

Dont get me wrong, I love these things and would love to use them, but I much rather track it on paper at the end of the day =)

Ah.. as much as I really love the idea of this, I did some fun math and have my own little suggestion..

Sorry about the length of the post, but it contains some background, math and a suggestion to solve this "real money vs. chits" problem.

If you really want to use these coins for the purpose of replacing all the money in the game with these, for a party of 4 people, you would have to fork out a lot of dough (Using King of the Castle chits):

Level 7 - 130 USD
Level 8 - 185 USD
Level 9 - 257 USD
Level 10 - 348 USD
Level 15 - 1344 USD
Level 20 - 4928 USD

So - in conclusion, I dont think one should use them for that purpose with the current pricing of items in the game. With that in mind, I tried figuring out how I would actually use them and I ended up with this potential solution:

Use a higher conversion rate than 10gp=1pp such as 100gp=1pp or even 1000gp=1pp. Since all prices in the game are in GP, this could work out very well.

Of course, the trouble with 1000gp=1pp would be that if you give out an average encounter reward at, say, level 7 - it would be 3 platinum pieces. Not exactly an epic feeling to get three coins, regardless of the denomination. One could of course mix in gp-chits into it, but that would still mean the need to buy them (a lot of them...)

100gp=1pp is better here - a healthy balance between the two. A reward for a level 7 encounter would be roughly 30 platinum pieces. Buying 2-3 packs of various GP-chits would solve that issue.

The trouble is that King of the Castle chits don't have 1PP chits. Paizo does - but those packs come with 4 chits of 1,2,5 or 10,50,100 PP and costs around twice as much.

So I figured I would think about how much money - realistically - my players would end up having stashed in total as a maximum. I came up with a couple of figures. In any given campaign, I expect my players to never have more 150 000 gold but of course that varies from DM to DM.

Here are some recommendations if you want to use this idea and what to buy for "the bank" for a party of 4 players:

200 000 gold per person: (~276 USD)
3 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8aro
3 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arp
5 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arq
12 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arr

150 000 gold per person: (~228 USD)
3 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8aro
3 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arp
4 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arq
9 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arr

100 000 gold per person: (~192 USD)
2 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8aro
2 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arp
4 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arq
6 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arr

75 000 gold per person: (~144 USD)
2 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8aro
2 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arp
3 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arq
5 packs of http://paizo.com/store/gameAids/other/campaignCoins/v5748btpy8arr

Since I run a game with 6 players that are currently around level 7 I don't think I will end up buying these, I rather spend money on maps =)

I would say no. Not that I dont see how it makes sense, because I totally do - but if you consider real life examples like Canada, where you have both English and French, although there are still many in Canada (even in Quebec) that dont speak both.

Also, since all humans know common by default, it wont "gimp" them to not know an additional language (even though looking at dwarves and elves and whatnots, it seems a bit unfair)

If they want to learn more languages, put a single skillpoint in Linguistics.

Thats my 2c though.

Thanks for all the feedback guys. I would like to leave flavor out of it, since the problem I have with that in this case is that flavor would affect the mechanics.

There are a number of occasions where it would be useful to have an actual official ruling for this, some that have already been brought up:

Target AC: 18
Target Touch AC: 12
Attack result: 15

* Target is covered in oil, and player is using a flaming weapon
Alternative 1: Player hits the target, does no damage with the weapon itself - however, could set the target on fire.

Alternative 2: Player misses target completely. Fire has no effect.

* Player has a charged touch spell that somehow has not triggered yet for some reason (held actions, etc) and tries to hit the target.
Alternative 1: Player hits the target, misses - but still lands the spell.

Alternative 2: Player misses the target and does not get to land the spell.

* Player has a familiar, casts a touch spell designating the familiar as the toucher, and the familiar in turn attacks the target in the same turn
Alternative 1: Player's familiar misses with its natural attack, however, manages to hit the target, unleashing the spell

Alternative 2: Complete miss again.

There are also other concerns my group and I have about this, including Osiriani Blade Binding, Bull Rushes and other CMB/CMD checks for attacks, multiclass monk-sorcers that could unleash touchspells with unarmed attacks, etc.

In 3.5 there used to be an optional rule about Glancing blows, but I have yet to see anything like that for Pathfinder.

Quite so - which is one of the questions that has arisen in my group right now.

Something that needs to hit normal AC, but only hits Touch AC has no effect, though as a DM its nice to flavor it up with "Your sword clashes into his armor... but glances off!"

True - however - lets say that a familiar has Shocking Grasp loaded up and ready to deliver it. Shocking Grasp is a Touch Attack.

Would this be legitimate:
Familiar attacks with its Claws (which normally would do, say 1d4 damage).

* Scenario 1:
Familiar hits AC 15, missing Normal AC - but - if the rule allows for it - hits Touch AC, and thusly delivers the spell.

OR is the case that the familiar does no damage at all?

* Scenario 2:
Familiar hits AC 19, hitting Normal AC - delivering both the Shocking Grasp, as well as the normal damage from the claws.

As StabbittyDoom just pointed out, he rules it differently. There are valid concerns to both approaches in my mind.

Official ruling would be nice, since the rulesbook is ambiguous about this.

An example;

The target has AC 18, and Touch AC 12.

If I roll 15, do I still manage to touch the target, or do I miss?

Is it a matter of intention, where you have to specify that you are trying to make an actual Touch Attack Action, or can you still expect to hit Touch AC with a normal attack as long as the attack lands between the touch ac and the regular ac.