A New App Uses Facial Recognition and Location To Pay Tips

Tip.ly is a new app that wants to make it easier for patrons to tip their servers.

The iPhone-only app is designed to solve the problem of how to leave a tip when a consumer has no cash. Consumers associate a payment card with their Tip.ly accounts. Recipients collect the tips in their bank or PayPal accounts.

The steps to make a tip differ based on whether or not the recipient is an existing or new user of the app. If new, the consumer must get the recipient to agree to let her take a photo from within the app of the recipient. That image, which is not stored on the smart phone, is used to match that of registered Tip.ly users.

If the recipient already has a Tip.ly account, his information will appear in the Quick Tips section of the app. The consumer selects the name, which is displayed with the photo, and press Tip to make the payment. The app also has a search function.

Recipients must create a Tip.ly account to receive their funds. Settlement into PayPal accounts take from 24 hours to 30 hours, Tip.ly says, and bank accounts as many as two days.

The consumer then selects the payment method to use and the tip amount. Consumers pay 5% plus 50 cents per transaction. Recipients pay no fees.

Tip  limits for senders are $100 per tip, $300 per day and $1,000 per week.