January 3, 2008, 12:00 AM

Intuit buys payment processor ECHO for $131 million

Intuit Inc., a provider of business and financial management solutions for small to mid-size merchants, will pay $131 million in cash to buy Electronic Clearing House Inc., a processor of Internet and automated clearinghouse payment transactions.

Intuit Inc., a provider of business and financial management solutions for small to mid-size merchants, will pay $131 million in cash to buy Electronic Clearing House Inc., a processor of Internet and automated clearinghouse payment transactions.

Intuit, best known as the developer of personal finance, small business and tax software products like Quicken, QuickBooks and TurboTax, says the acquisition will round out its payment services for merchants with check services. It will also provide Intuit with relationships with thousands of ECHO customers, including some larger companies.

The acquisition is subject to regulatory review and Electronic Clearing House shareholder approval and is expected to close in the first quarter. Under terms of the agreement, Intuit will pay $17 per share in cash in exchange for each share of Electronic Clearing House common stock. Electronic Clearing House, also known as ECHO, will become a wholly owned subsidiary of Intuit.

ECHO provides an Internet payment gateway service for processing online transactions, with built-security designed to protect the merchant, cardholder and the Internet service provider. It also provides its application programming interface to web site developers or ISPs for connecting to the ECHO processing system. ECHO will support Intuit’s ability to offer solutions to merchants that address the most commonly used payment methods, including Internet-processed e-checks, online credit and debit cards, automated clearinghouse and gift cards.

ECHO also provides retail site hosting through its MerchantAmerica.com program, which offers full shopping cart capability as well as payment processing.

Intuit had previously signed an agreement to acquire ECHO in December 2006 but the parties mutually terminated the arrangement in March 2007. Since then, ECHO refocused its business and addressed governmental concerns while continuing to grow revenue, Intuit says.

“Since our last discussions with ECHO, we’ve continued to survey the market and believe today, as we did then, that ECHO is a great strategic fit for Intuit,” says Brad Smith, senior vice president and general manager of Intuit’s small business group. “We expect ECHO’s technology and operational assets will help us accelerate Intuit’s growth and strengthen our expanding small business ecosystem that includes the fast-growing payments space.”

comments powered by Disqus

Advertisement

Advertisement

Advertisement

From IR Blogs

FPO

Michelle Pacynski / E-Commerce

What it takes to create the ULTAmate online shopping experience

The ULTA beauty brand has gone through an e-commerce revolution in recent years, says one ...

FPO

Bill Siwicki / Mobile Commerce

Should I PIN my hopes on Apple Pay?

I was excited for Apple Pay. And I still am. But boy did I ever ...

Advertisement