Monday, April 25, 2011
Innovative Merchant Solutions, the payment processing arm of Intuit Inc., is terminating its agent program effective July 31, 2011, the end of its fiscal year. IMS National Sales Manager Jeff Broudy confirmed his company is ending its agent program.
"It's no longer a channel Intuit is focusing on," he said. "We are turning our attention to our core channels. We've just decided not to use our agent channel as one of our core channels."
Broudy noted that the revenue generated by agents has been falling over the years. "We really haven't been investing in the agent channel," he said. "For regular ISOs the agent channel is their bread and butter. We really didn't put enough resources and focus into our agent channel. There are so many opportunities in our business strategy. We are really different than the normal ISO because of our ecosystem."
Intuit is the manufacturer of popular small-business software systems such as Quickbooks, Quicken, and TurboTax. In 2003, Intuit acquired IMS to be its bankcard processor. IMS now has an annual processing volume of nearly $10 billion and more than 25 million customers. As many as 7,000 agents in 13 states could be impacted by the decision to terminate the agent program.
"I think big and small companies each have their own DNA," Broudy explained. "Some have DNA that is very good in certain sales channels. Typically, if you focus on a few, critical sales channels you get better. We found our agent channel is not one of the few critical channels we wanted to focus on."
Some industry insiders are speculating there is more to the IMS decision to terminate its agent program than IMS is letting on. US Merchant Services Chief Executive Officer Steve Norell believes merchants just got fed up with IMS' service and fees.
"I can only speculate, but I can tell you what I saw in person," he said. "When they opened their offices they were hiring people left and right. The people they hired started culling merchants and giving out erroneous information.
"The problem is a company like Intuit doesn't understand this business at a street level. I think they were probably hit hard over the years by a lot of angry merchants. I don't think their agent program was as successful as they thought it would be. I mean, why should they have street agents when they can just pay someone $10 an hour to sit at a desk and take orders?"
Norell made another observation. "They have three channels out there, and they are all competing with each other every day of the week," he said. "You just can't have that and have all three be successful."
There was lots of chatter on GS Online's MLS Forum about the Intuit agent termination. None of it was flattering. A forum member who goes by SLICK STREETMAN commented, "Par for the course for a publicly held corporation. The greedy stockholders probably figured they could bleed a few more bucks in to their pockets if they didn't have to pay residuals."
SDSORENSON added this to the forum discussion, "I think that's awesome! Innovative Merchant Services [Intuit] in my area is home of the 'no contract' processing – except for the $295 deconversion fee which is never disclosed. Also no mids, nons, ten-cent trans fee, unrealistic savings proposals, etc., etc., etc. … One less rotten apple in the barrel."
Another forum member, HIPOINT, agrees with Norell's assessment. "To my mind … Intuit enjoys a respectable reputation with their other products, Quickbooks et al.," he stated. "I'm thinking the number of merchant complaints Intuit had to deal with as a result of their … agent boardings is the reason they terminated the program."
CCGUY posted that when he looked over an IMS statement for a merchant and "added a few lines together," the merchant "almost fell off the chair" when he saw how much he was paying IMS for processing.
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