Magazine article American Banker

How Intuit's Deal for Check Could Change the Mobile Money Game

Magazine article American Banker

How Intuit's Deal for Check Could Change the Mobile Money Game

Article excerpt

Byline: Mary Wisniewski

Intuit Inc., a longtime frenemy of banks, may end up raising the bar for mobile financial services with its latest acquisition.

The owner of Quicken, QuickBooks and Mint is buying yet another fintech darling: the mobile bill payment provider Check. The $360 million deal would give Intuit a goldmine of financial data, mobile-centric bill payment capabilities, a team of technologists aspiring to create the go-to financial app for mobile devices and a business that profits off certain consumer transactions.

Banks, which do not charge for bill pay, often believe it improves customer retention but have had a hard time getting more customers to use it in recent years. They will want to keep a close eye on the Check deal, because Intuit is acquiring strength in an area where many banks are weak: intuitive bill payments for the fast-growing mobile channel.

Check, designed to be used for day-to-day finances, is perceived as a modern and elegant way to pay bills digitally that could make other Intuit services more useful -- including those geared to small businesses. Over the longer term, Check's technology, with Intuit's marketing budget behind it, could shape consumers' expectations of bill pay through financial institutions and inspire entrepreneurs to cook up similar software to disintermediate banks.

"Check is a slick, appealing option," says Mark Schwanhausser, director of omnichannel financial services for Javelin Strategy & Research. "Banks and credit unions lose whenever Intuit and others weaken the feeling that [financial institutions] are the trusted place consumers turn for advice, recommendations, and a sense of control when monitoring and managing their money."

Formerly known as Pageonce, Check counts 10 million registered users and has received $49 million in total investment in its seven years of existence.

The acquisition would give Intuit another source of financial data it can crunch to cross-sell consumers third-party products like credit cards or something it offers, like tax preparation services. Some view this advantage as the more direct danger to banks.

"I think in the overregulated world of banks, Intuit is thinking [it] can offer more and more bank-like functionality without being a bank," says Shawn Ward, chief executive officer and co-founder of Geezeo, a personal financial management provider.

The deal for Check, according to Ward, resembles Intuit's acquisition of Mint in that it wants to own the engagement platform. In so doing, it can profit from referral fees and pitch users its own products.

"The digital landscape is a bigger threat than when a traditional bank competed with one down the street," says Ward.

Jim Bruene, founder of Finovate Group, views the deal as one that could make Mint and Quickbooks more profitable, without any need to cannibalize the banking business in the near term.

To understand why Intuit would pour millions of dollars into a mobile bill payment provider -- more than double what Intuit paid in 2009 for Mint, which now claims 14 million registered users -- keep this in mind: 37% of all bill payments will be made through the mobile channel by 2018, according to AlixPartners.

"Mobile is a key driver of bill pay opportunities," says Guy Goldstein, Check's chief executive.

Check has a jumpstart on the category.

The firm, founded in 2007 in Palo Alto, Calif., by Goldstein, a former Israeli fighter pilot, has always had its roots in mobile. The app's use case, however, evolved over the years: What started off as an app for storing passwords for online shopping turned into a digital service exclusively for bill payment. …

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