Intuit's decision to shed its digital banking division demonstrates the technology developer's position that banks aren’t the only way to marry merchant services with consumer mobile payments.

"What is evolving more and more in the mobile payments space is the need to operate both on the merchant side and on the consumer side. Banks are just one avenue to get to consumers, but they aren’t the only avenue," says Rick Oglesby, a senior analyst who specializes on mobile commerce and digital payments at Aite Group. "PayPal’s was eBay, and Amazon created its own avenue, as did Apple and Google."

Thoma Bravo will acquire Intuit Financial Services for about $1 billion, the companies announced on July 1, and the private equity company will build a stand-alone company to sell bank technology to financial institutions.

Intuit will keep the personal financial management site, as well as its Small Business Financial Solutions unit. Intuit is also expected to retain merchant services such as the GoPayment card reader and the QuickBooks point of sale system. Thoma Bravo and Intuit did not return requests for comment by deadline.

"Keeping as a budgeting tool makes sense," says Phil Philliou, a payments consultant, who says that can be connected with Intuit’s core tax and financial planning business. The deal also positions Intuit well to serve small business, another core competency, he says. "Nobody understands small business better than them."

The financial services sale is one of a number of structural moves for Intuit. It’s also selling its Health Group and restructured its executive duties in May. Among the executive shuffle was naming Dan Wernikoff senior vice president and general manager of Small Business Financial Solutions, a global division that includes QuickBooks, Intuit Payment Solutions and the Intuit Partner Platform.

"I’d definitely separate the merchant side from the banking side and say that they are truly different businesses. There is some interrelationship but the major payment networks were formed to bridge the gap between the merchant side and the banking side," Oglesby says. "It’s certainly fair to assume that in the future we will have payment networks and/or other service providers that will continue to do that."

On the merchant side, a company could build its own mobile wallet, which requires an avenue to consumers, Oglesby says, or integrate with third-party wallets, of which bank-issued wallets is just one possibility.

"With or without the banking division, Intuit is positioned to do either," Oglesby says. "Its acquisition of Aislebuyer gives them the capabilities to create their own wallets, and their ownership of their own merchant processing and POS infrastructure gives them the opportunity to integrate with third party wallets."

Intuit faces myriad competitors in the small business payments market — Square, PayPal, and WePay are among the startups that also offer mobile point of sale technology.

Tools for small business such as QuickBooks have always been at the core of Intuit’s proposition, says Zil Bareisis, a senior analyst at Celent. "In recent years, that proposition has been enhanced to include payment acceptance solutions, such as GoPayment and Intuit Pay. Integration of those solutions with QuickBooks remains an important differentiator in the mobile point of sale market, and collectively, they form a robust toolkit for small and medium sized business," Bareisis says.

Intuit has been investing in GoPayment recently. It expanded service to the United Kingdom, added iPad camera technology, as well as technology that allows retailers to make sales on the floor while maintaining connectivity to inventory.

"Intuit is not encumbered by developing mobile payments through the banking relationships," says Richard Crone, a payments consultant. "It looks as though Intuit is injecting itself between the bank and the customer with their own user interface."

The Thoma Bravo team has experience in financial technology. Carl Thoma was also part of GTCR, the company that purchased Fundtech and Bankserv. Thoma Bravo will be challenged to sell its new financial technology to consumers, Crone contends.

"Thoma Bravo has to get this right, the big hole here is mobile payments," says Crone, saying the Intuit sale carries technology from an earlier acquisition of Digital Insight, a suite that lacks the latest development in mobile payments. "They have funds transfer, but that’s not the same thing as mobile payments at the point of sale. Thoma Bravo has to come up with something quick. The Digital Insight legacy platform was geared toward Internet 1.0 and we’ve moved to mobile 7.5," Crone says.

The Intuit/Thoma Bravo deal may also signal an active period to come for payments and financial services technology mergers and acquisitions.

"While purely coincidence, it only goes to underscore the opportunity that payments represent for investors. With processors like Nets up for sale, and allegedly several other key firms as well, we believe this will be far from the last deal announced this year, says Gareth Lodge, a senior analyst at Celent.

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