It detects by sending your location to our server every 15 minutes. If you and a friend both send the same location, we send you a notification asking you to check in with your friends.

As to making money, I don't know - maybe using one of the existing in-app ad networks, with a $1/year upgrade to pro version with no ads?

It doesn't have to make money. He said he's thinking of building an app, not building a business.