Check Purchase Will Help Intuit Customers Look Forward, Not Back

Last week, Intuit announced it would acquire bill payment provider Check, formerly known as Pageonce, for $360 million.

In the wake of the announcement, some industry watchers questioned why a company with Intuit‘s prodigious resources would need to pay a premium for capabilities it seems capable of developing in-house.

But an Intuit spokesperson said Check will allow Intuit customers to take action and, therefore, look ahead, not back.

Customers
Check is not a cash cow. As Re/code pointed out, Check’s revenue was just $16 million last year and forecast to be $20 million this year, despite Check counting more than 10 million customers.

Intuit counted about 5 million business users of QuickBooks in 2012, though the number is likely higher today. (Intuit has a total customer base of 45 million users, a company representative said today.) Mint.com, Intuit’s personal financial management tool that competes with Check’s product but lacks bill payment capabilities, has 14 million users. Check’s 10 million would, therefore, add considerably to Intuit’s number of non-business users and deepen its consumer penetration. With the line blurring between small businesses and customers — anyone with a dongle can be a merchant — gaining consumers as customers, even if little revenue results, makes sense.

Technology
Holly Perez, senior communications manager with Intuit, told Bank Innovation that, while Intuit’s Quicken and Mint products have historically provided customers a look back at transactions, Check’s technology can help customers take action. Check’s CEO Guy Goldstein has spoken about the company entering mobile payments, but again, it is hard to see how its technology can top Intuit’s in this area. Intuit has a deep payments infrastructure in place for QuickBooks, and has a mobile payments play in GoPayment.

“Bill pay is a strategic capability that will add value across the Intuit small business ecosystem,” Perez wrote. “Bill payment is a ‘must do’ activity for our consumer and small business customers, and it makes sense to focus on making it easier for them to pay bills and transact.”

Talent
Intuit was also interested in Check’s talented staff, Perez wrote. “As for Check’s talent, Intuit is gaining a strong, talented team credited with notable development in advanced web data collection tools and a patented payments technology,” she wrote.

The strongest case to be made seems to be that Check delivers customers to Intuit, as well as bill pay capabilities. Manilla’s recent announcement it would cease operations probably helped make Check’s case as well.

The $20 million in Check revenue will not move the needle for Intuit, which earned $4.2 billion in 2013, but it will still need a to find a way to make the Check deal pay off.