mall-business software giant Intuit Inc. is moving into the ISO and check-processing business in a big way. The maker of the popular Quicken, QuickBooks and TurboTax financial programs is buying Electronic Clearing House Inc. (ECHO).

Although subject to regulatory and shareholder approval, the boards of both companies have already approved the merger. The deal is expected to close during the first quarter of 2007.

"With over $2.3 billion in annual revenue, Intuit has a very strong brand, innovative products, and focus on customer-driven innovation," said ECHO President and Chief Operating Officer Chuck Harris in a letter informing employees of the acquisition. The company had 230 employees at the end of September 2006.

Intuit already provides payment processing services to 175,000 small and mid-sized businesses through its Innovative Merchant Solutions division, which it acquired in 2004, Harris stated. With ECHO's staff, technology and customers, "we believe that Intuit will be very well-positioned to accelerate its expansion into the rapidly growing and underserved payment processing market for small to mid-sized companies," Harris wrote.

A top place to work

He told employees that the two companies share similar corporate cultures. For the past five years, Fortune magazine has named Intuit one of the 100 best companies to work for.

The day the acquisition was announced, ECHO reported its bankcard and transaction processing volume had risen 49.6%, to $1.8 billion in fiscal 2006. Total bankcard revenue increased 38.7%, to $57 million.

Check services revenue, which increased 26.8% to $18.3 million for the year, accounts for 24.3% of the company's revenue. Card-not-present merchants make up 75% of ECHO's monthly credit card volume, according to the annual report.

The acquisition of ECHO will expand Intuit's reach in the fast-growing payments market, Intuit President and Chief Executive Office Steve Bennett stated in announcing the deal.

With ECHO's automated clearing house capabilities, Intuit will be able to round out its payment offering with check services. The company will be able to provide merchants credit, debit and gift card services and check verification, guarantee and conversion through a single portal.