Paidpiper Inc., once a poster child of MasterCard Inc.'s push to work with small developers, is finally ready to launch its product — without its previous reliance on MasterCard.

Last year, MasterCard talked up Paidpiper, a startup with about 10 employees, as an example of the sort of company it could attract with its open application programming interface. The Purchase, N.Y., card network even fast-tracked one element of its API to suit Paidpiper's needs, but eventually Paidpiper dropped its use of the MasterCard API.

"There are a lot of complexities when working with large companies," says Atif Hussein, Paidpiper's founder. "We wanted to work with some of the software they had … but we needed a little more flexibility in terms of how we went to market."

A MasterCard representative said the company would not discuss its relationship with Paidpiper.

Paidpiper announced its new Ok'd mobile app on April 29. The app allows users to request funds from another person, such as a parent, before making a purchase. Shoppers use the app to snap a photo of a desired item and send that photo to the payer. When funds arrive, the app generates a one-time-use card number that works only at the specific merchant for the requested dollar amount.

The app was initially geared towards consumers, but as the product matured Paidpiper saw its potential to help merchants drive foot traffic.

Merchants can create social media promotions that offer discounts to a certain number of customers for shopping at one of their locations. In this way the merchant recoups its investment in social media and creates controlled on-the-fly campaigns.

"With the proliferation of smartphones … and consumers being in communication with each other all the time, apps and companies are jumping out to try and fill in gaps that have friction today," says Todd Ablowitz, president of Centennial, Double Diamond Group LLC.

The two most prominent use cases for Paidpiper's app include teenagers requesting money from their parents and employees requesting money for business expenses.

But the app could be used to buy food for a dining companion who isn't present to place an order, Hussein says. "It's like a super version of Yelp … where you get reviews from people you don't know and now you'll have to put your money where your mouth is," he says. 

Ok'd provides "an easy way to ask for and send money without it being insecure," Hussein says.

The released app has several other features that weren't imagined when Paidpiper first announced its idea in June.

Ok'd uses geo-fencing technology to locate the recipient and make sure they're purchasing at the requested merchant (it previously planned to use a merchant ID feature in MasterCard's API).

The app also has a chat function so both parties can discuss the purchase. Ok'd also calculates sales tax and adds that to the purchase amount. And if more money is sent than is used for the purchase, the extra funds will be returned to the sender.

"What people like about our app is you get control and get real-time notifications and there is no breakage," Hussein says.

The app is currently in pilot. Users must pre-register before downloading the app; so far, several hundred consumers have pre-registered for the app, which will be available in the Apple app store in a few days, says Hussein.

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