Anu Shukla_insideAnu Shukla has quite a reputation preceding her. In 2009 she was the CEO of social monetization service, Offerpal. After a very public exchange with Michael Arrington in 2009 concerning Offerpal’s business model, Shukla stepped down from her post, and has since kept a relatively low profile.

Last year, however, she launched her latest venture RewardsPay, and after remaining quiet is now ready to divulge more details about her much publicized departure.

RewardsPay is a simple concept: it uses loyalty rewards as a form of currency for payments from various merchants, such as iTunes and gaming companies. Take, for instance, the frequent flier miles you’ve accrued for the past 15 years. Instead of only being able to purchase airfare, RewardsPay allows you to buy goods from retailers who accept the miles as payment for other goods. Shukla told me that, as of now, it has acquired about $4 million of initial funding from angels and early stage VCs.

Shukla just sees RewardsPay as an almost completely untapped market: “Our intention is simply to allow users to use their rewards.” It’s simple enough, and it’s hard to believe other startups haven’t come up with this plan just yet.

The veteran entrepreneur has quite a colorful history. Back in 2009, she was CEO of the social monetization company Offerpal (now Tapjoy). Following allegations by Michael Arrington that as much as 30 percent of Offerpal’s business was garnered due to scamming techniques, Shukla and the TechCrunch editor had a verbal tête-à-tête, calling Arrington’s assertions “shit, double shit, and bullshit.” This led Shukla to step down from her post shortly thereafter.

This business, thankfully, doesn’t involve ad monetization, meaning it probably won’t be saddled by the same kind of accusations.

Shukla told me that every year, $16 billion of unredeemed rewards are accrued. While most of these are in the form of frequent flier miles, she believes that there should be more ways to spend these awarded bonuses.

She has worked the last year signing on various retailers who would accept rewards as payments. As of now she has as many as 40 lined up, she told me. While she’s not ready to say exactly who all of them are, we should know by the end of the summer. As of now, the merchants RewardsPay houses are a bunch of music and entertainment merchants, such as iTunes, Facebook, Grooveshark, and a subdivision of Disney.

RewardsPay is coming at quite an advantageous time. New and innovative payment platforms are on the rise. For example, there’s Chris Dixon’s belief that bitcoin could be successful as a new, easier way to transact payments. There are other innovative modes of payments, as well, for example Zooz, which is a mobile payment platform that allows for in-ad payments.

All these add credence to why the number of mobile payment platforms have been contunially on the risewith in-store mobile payments nearly quadrupling last year. Shukla believes RewardsPays takes this a step further by making a platform that utilizes the often-forgotten currency of rewards. In addition, it plans to release a mobile app sometime in the very near future, further aligning with the trend of “new mobile payment platforms.”

The real question, however, will be in how many retailers adopt it. While it’s great that iTunes will now accept my miles, there’s only so many Kanye albums I can download. If retailers like Gap, or, even better, eBay join, then I can see this platform gaining some real forward momentum.

We’ll just have to wait until all 40 are announced. Shukla, however, is sure that people will be excited. Rewards programs, as she sees it, are ways to “engage customers.” She sees the billions of dollars in unused rewards as a means to attract a completely untapped market.

And just imagine what the world would look like if all $16 billion of rewards were claimed this year. RewardsPay will try to bring us closer to this reality.