Square is obviously trying to tackle this with Square Register by replacing POS systems altogether which includes a slew of features they offer including paperless receipts emailed (with geolocation, etc...).

That said, I don't think that bears anything on you being able to compete but I do think trying to tackle this problem is incredibly difficult on a large scale. The other issue is some people will always want printed receipts. The question about sustainable business model is whether or not businesses see a reason to pay you for your service over what they are currently doing.

The eco-friendly pitch is one that matters to a niche group of people (even more so when you consider practitioners; personal belief). I don't have statistics to back this up but what I do believe is at the end of the day, it boils down to what advantage the business gains out of doing this. From a consumer standpoint, only subgroup will really care starting out.