Called Clinkle, it works through any credit card or bank account.
An A-list of VCs has put up the money - Andreessen Horowitz, Peter Thiel, co-founder of PayPal, Accel, Intel, Intuit and others.
“I don’t think anyone has been able to crack the nut in the sense of being able to build something that is a serious contender with cash and cards,” says Lucas Duplan, the 22 year-old founder of Clinkle.
Duplan points to the absence of any method that enables a phone to pay a merchant without replacing the point of sale system.
He says he's done this without requiring infrastructure change and his method is an order of magnitude better than using cash or cards.
The system is currently operating on US university campuses.