• by Mark Walsh  @markfwal, July 27, 2010

Startup CardStar earlier this year gave people a way to store loyalty card accounts in one place through a scannable iPhone app. Now the company will allow users to check in to locations via Foursquare when they use their loyalty cards.

CardStar CTO Danny Espinoza said the new feature would help extend the Foursquare phenomenon beyond bars and restaurants to retail stores. "There's not a lot of checking-in going on at retail locations," he said. In addition to allowing someone to become the "mayor" of a local CVS or Best Buy store, it also opens the door to retailers creating a new set of rewards tied to check-ins.

In addition to the Foursquare integration, the latest version of CardStar's free iPhone app adds another location-based service called Favorite Places that automatically displays the appropriate loyalty card for a given location on the phone screen after users have entered a list of retailers they frequent most. It also automatically adds Foursquare check-ins when users visit favorite places.

Another new feature lets people back up and sync loyalty card numbers across multiple devices. CardStar Connect provides users with a PIN code to access loyalty card data stored in the cloud and assigned an anonymous ID to help protect user privacy. The service also provides a new channel for CardStar to present users with promotions and coupons from merchants among its 700 participating retailers.

The upgraded CardStar app also includes an updated store locator and maps window for accessing neighborhood maps, merchant Web links and account links more easily. "This iteration is really our first watershed change from being a utility to being a platform that integrates third-party offerings," said Espinoza.

The two-year-old Conn.-based company has 650,000 users to date who have downloaded its app 2.1 million times, primarily on the iPhone. Versions of the CardStar app for Android and BlackBerry devices were released in recent months, and the company plans to introduce an iPad app within the next two months. But Espinoza said the iPad version will be more focused on coupon distribution, since people can use it at home to sift through offers before using the mobile app to make in-store purchases.

CardStar raised $1 million in first-round venture funding earlier this year and Espinoza said he expects the company to raise additional financing by year's end.

NOTE: A previous version of this story incorrectly stated that CardStar was based in San Francisco.