A Perspective On Intuit's Acquisition Of Digital Insight

Here's the report Carol filed:

I spoke recently with Martha Deevy, Vice President of Intuit's Financial Institutions Group and key sponsor and champion of Intuit's pending acquisition of Digital Insight. At first glance, I had been skeptical about the transaction - after all, banks have had a long and rocky road with Intuit, and still have very mixed feelings about their basic value proposition. But I've become convinced (and the conversation with Martha helped!) that the business combination could provide some very real value to banks' small business customers.

Small businesses have long been underserved by banks in payments products - being caught between bank offerings for consumers and those for large enterprises. Someone once summarized for me banks' problems with this market by saying that small businesses have "low payments volumes, but high payments needs".

Those payment needs have to do with being able to post payments (inbound and outbound) to their accounting software and reconcile it with expectations. Banks have been loathe to walk too far down that path, with no clear return in view.

Well, no one knows more about small business accounting software - and small business needs - than Intuit. So - it becomes very possible to imagine an outbound EFT from a small business checking account (whose bank is using Digital Insight as their online banking processing platform) which has been created and initiated by pulling information out of QuickBooks. Further imagine that the EFT transaction is carrying standardized electronic remittance data (perhaps using the EPN820 format?), also pulled out of the sending company's QuickBooks system.

Now, the receiving side is a bit trickier - but imagine that the receiving company sees an inbound transaction on their online banking system with a button that says "click here to post to QuickBooks" (sort of like posting a calendar item from an online invitation or email).

Wouldn't it be something if a small business could have their credit card acceptance (already offered by Intuit), their inbound EFT and their deposited check information all rationalized by their online bank - and posted to their QuickBooks system! Intuit's just announced acquisition of Echo might help there.

You get the idea. It will be fascinating to watch this evolution - and we wish Martha and her team all the best as they bring together some of these ideas - and, I suspect, others they've thought about but just can't talk about yet!