A new mobile app for smartphones that allows customers to leave tips without using cash could potentially save private clubs, resorts and other service-oriented businesses thousands of dollars or more annually in credit card processing fees.

Tiply, which was launched in late November 2014, is a mobile payment platform with which customers can directly tip valets, waiters, banquet staff, spa and salon workers, and other service providers without having to first visit an ATM for cash or try to get change.

But just recently, the service introduced software for businesses so that customers can select to tip a tip pool instead of an individual service provider. “The software allows clubs and businesses to manage the amount a certain employee gets tipped from the tip pool by the parameters they set up,” explained Tim Baldwin, CTO and co-founder of the Scottsdale-based company with CEO Stephen Campbell. “For example, a business can tip out by hours worked, days worked and so on—they can customize it for their specific needs.”

Baldwin has more than 15 years of technology experience as an entrepreneur and IT executive. He was formerly the CIO at Wilmington Trust Retirement and Institutional Services, managing more than $50 billion in retirement assets. Campbell is an entrepreneur and early stage investor with more than 10 years of executive leadership experience building companies in the retail, financial services and technology industries. He co-founded MiCamp Solutions, one of the fastest-growing payment processing companies with more than $1 billion in annual volume and more than 1 million transactions monthly.

For an individual to set up the service, it takes only a few steps. The tipper registers a credit card, takes a photo of the person receiving the tip, that is, if the recipient is not yet registered, and selects a dollar amount for the tip. The tip recipient then has 14 days to create an account online or through the Tiply app, take two selfies to match the photo taken at the time of the tip, and connect a bank or Paypal account in order to collect the tip. Once a tip recipient is registered with Tiply, they can register the place(s) they work and Tiply’s GPS technology will display them for all tippers in the QuickTips menu. Tippers simply make a selection rather than take a photo.

The tipper pays a convenience fee of 5% of the tip plus $0.50. For example, a $5 tip will cost the tipper $0.75. The transaction is free for the recipient. If the tip isn’t claimed within 14 days, the money is not charged to the tipper’s payment card.

“The great thing about it is that there is no exchange of confidential information. Tiply matches the recipient’s profile photo to the photo registered by the tipper on our secure servers. We do not store photos on users’ cameras or photo albums,” explained Baldwin. Tiply secures its financial data using the same encryption that U.S. banks and other financial institutions use. The transaction shows up on your credit card statement but does not reveal the recipient.

No matter how Tiply is used, Baldwin pointed out, businesses can save substantially on credit card processing fees. Citing a major national massage chain, he estimates that the chain processes roughly $216 million in tip revenue per year. “It receives no money from the tip revenue-it all goes to its therapists, as it should. Yet, it must pay anywhere from 2-3% in credit card processing fees on the $216 million. By utilizing Tiply, it would no longer have to pay these fees on money that doesn’t even go to their bottom line.”

Currently, Tiply is only supported in the United States but the company’s plans are to expand internationally. To download the Tiply app for iPhone or Android, go to http://lksn.se/tiply.