Mobile Startup Pays Consumers to Scan Their Receipts

Probably the biggest obstacle to mobile commerce, be it for payments, shopping, deals or loyalty programs, has been merchant adoption. With every supermarket, retailer and grocery chain employing a different array of hardware and technology for their own loyalty programs and couponing rewards systems, tackling the merchant issue is not easily solved -- at least, not at scale.

In fact, many see it as the main hindrance to Isis, the mobile commerce joint venture from carriers AT&T Mobility, T-Mobile USA and Verizon Wireless. It's also why some have high hopes for the recently debuted MCX, a mobile-wallet joint-venture undertaken by several retailers themselves, including Best Buy, Walmart, 7-Eleven and Target.

But for one startup, there is a clear and simple way to solve the merchant problem: bypass them entirely.

Endorse, run by founder and CEO Steven Carpenter, is a mobile app and loyalty platform, built on extracting data from photos of receipts. Consumers browse the deals and rewards either before or after they shop, go to their local supermarket to … well, do what people do at supermarkets, and upon conclusion, scan the receipt.

Users then select the deals that apply to their purchases, and Endorse identifies the match, applying the coupon or deal brokered directly with the CPG companies. No coupon clipping, no more giving your phone number to the cashier because you lost the little card they gave you, and no more fighting over expired coupons or fine print limitations.

By making couponing a more user-friendly experience, Endorse hopes to become a gatekeeper to a wealth of very actionable data, even on retailers that keep their own data close to the vest. Then it can pass that on to partners, as well as target more desirable deals to consumers in the future. Right now, PopChips and several PepsiCo brands are offering deals on the platform.

"Right now, most brands don't have access to cross-retail product-level purchase data," said Mr. Carpenter, because the retailers don't share it. They might get snapshots, but they don't get longitudinal data -- one user's purchase habits over a period of time."

Knowing that a given consumer who buys "X" is also likely to buy "Y" can be empowering information, especially when viewed over a period of time and for multiple merchants.

Mr. Carpenter said privacy was designed into the app so that personal information is never shared with marketers. Incidentally, Pew just released a report on the topic of mobile privacy, noting that many adults shy away from apps that demand too much personal information. In this case, however, it may be well worth the tradeoff, as the more the users use the app, the more tailored it will be to their specific needs and preferences.

For the moment, Endorse still cuts users a check after hitting the requisite minimum of $25 in rewards, though digital payment is almost certainly on the horizon.

The 12-person company has raised $4.25 million in funding from SV Angel as well as Accel Partners, where Mr. Carpenter was entrepreneur-in-residence.