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Imagine being able to tip a hotel bellboy or your pizza delivery man simply by snapping a picture of them with your phone.

It sounds a bit creepy, sure. But that’s exactly what Tip.ly, a startup announcing its service today at the Money20/20 conference in Las Vegas, wants you to do. The whole idea is that you never have to miss out on tipping someone simply because you don’t have cash – you just need your phone.

To tip someone, link a bank account or credit card to the Tip.ly app. Then take a photo of the recipient’s face, add the amount you want to tip, and Tip.ly does the rest. The app uses facial recognition to find a match of the photo you’ve taken in its database of user photos.

Once it finds a match, Tip.ly sends the entire tip to the recipient. The user leaving the tip is charged a flat fee of five percent plus 50 cents.

In turn, this means that unless and until the recipient creates an account with Tip.ly, they won’t receive the money. When they register, Tip.ly prompts them to submit several selfies to build their facial identity in the database. They also have 14 days to claim their tips.

“It gives me the power to tip anybody I want without worrying if they’re registered or not,” Tip.ly cofounder Tim Baldwin said in an interview with VentureBeat.

People can also tip nearby people who are already registered users through a feature that lets them browse through Tip.ly users nearby.

The Tip.ly team expects people to use the service for a variety of situations, such as tipping Uber and Lyft drivers, TaskRabbits, and other on-demand service providers. Along with the warm feeling of knowing that they’ll receive the entire amount of the tip for themselves, as tips should work, this app is also likely to catch on with the same type of consumers that use on-demand service apps regularly.

With that said, since Tip.ly is a peer-to-peer payment method, some folks might also start to use it as an alternative to Venmo or Square Cash, although it’s more expensive (Venmo is free when paying with a checking account and adds a three percent fee for credit cards, Square Cash only allows debit cards and charges no fee).

The company’s app has been quietly out in the iOS app store for a week now, and it’s working on releasing an Android version in the next 30 to 45 days. Tip.ly will also start to make its software development kit (SDK) available with select merchant partners, likely retailers or service providers who will integrate the SDK into their own apps.

Tip.ly was founded in 2013, and is based in Phoenix, Ariz. The company has raised $800,000 in seed funding, and is now raising about $2 million for its next round.


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