Intuit’s $116 million purchase of credit and debit card processor
Innovative Merchant Solutions late Tuesday signals a strategic step forward
in its merchant account business.
The maker of personal tax and small business accounting software said it
signed a deal to acquire Calabasas, Calif.-based Innovative, a provider of
credit and debit card processing services for small businesses, for up to
$116 million in cash. The company said it would build IMS’s products into
its Right for My Business small business division.
“The deal strengthens the company’s offering of critical
‘beyond-accounting’ services — merchant account services,” said Steve
Bennett, Intuit’s president and chief executive officer.
Since starting the merchant account division from scratch three years
ago, it has attracted 40,000 customers and now represents about $9 million
in revenue a year to Intuit, company officials said. Now, with the purchase
of IMS, which is expected to close this month, the Mountain View,
Calif.-based Intuit has an expanded array of merchant account products to
offer its base of merchant customers, including new payment options such as
PIN debit card processing and swipe terminals.
In addition, Intuit said its new offerings to merchants would be
integrated with its suite of QuickBooks, the company’s flagship accounting
software line.
Merchant account services are seen as an increasingly attractive
opportunity as e-commerce grows. Intuit cited The Nilson Report, which
said total credit and debit card spending was approximately $1.7 trillion in
2001 and is expected to grow 9 percent annually through 2005.