Verizon bets $400K on mobile loyalty card startup CardStar

Verizon is clearly eager to get into the mobile payments game. We recently reported that it was joining up with T-Mobile and AT&T for a mobile payment venture that could potentially compete with credit cards. But such a project will likely take years to come to fruition — so what can Verizon do in the meantime? One idea is to look at the other cards consumers keep in their wallets — specifically, membership cards and loyalty cards.

That’s what Verizon had in mind when it invested $400,000 (through its investment arm Verizon Ventures) in the Boston-based mobile startup CardStar, according to the Wall Street Journal.

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CardStar’s mobile app — available for the iPhone, Android, and BlackBerry — allows consumers to consolidate all of their reward and membership cards in one spot. So ideally, you won’t have to deal any longer with those obnoxiously tiny cards from grocery stores and pharmacies.

Other apps can also consolidate reward cards, but CardStar stands out by allowing merchants to offer promotions and loyalty programs through its own back-end. The company has over 2,000 merchants on board, both large and small, and it offers merchants a variety of ways to use its app. That’s particularly important if a merchant doesn’t have a scanner that can read bar codes.

To make it even more relevant, CardStar recently announced that it will be integrating its service with Foursquare check-ins.

The investment, though small, is a sign that carriers are getting interested in other aspects of mobile commerce. And with the success of deal sites like group-buying service GroupOn, brick-and-mortar retailers may find it useful to tie their deals and loyalty programs more closely to the web and mobile devices.

CardStar has some 700,000 logged users, CardStar CEO Andy Miller told the Wall Street Journal. It previously raised a small seed round in the summer of 2009 and scored another $1 million in March from Amplifier Ventures, LaunchCapital, and Acta Wireless.