Intuit Inc is swapping its Intuit Services Corp back-end bill payment processing unit for shares worth about $228m in CheckFree Corp, representing a stake of about 23%. The transaction, says the Mountain View-based company will enable it to decouple sales of its core front-end software products, such as Quicken personal finance software, from its private back-end processing network, potentially alleviating widespread concerns among bankers that Intuit’s control over both elements of the emerging electronic banking system gave it direct access to a bank’s customer base. Intuit said its decision to swap its payment processing unit for an equity position in CheckFree is designed to give banks and other financial services firms using its software products such as Quicken a choice of financial processing options, including the Internet. Intuit intends to sell about 2m shares of CheckFree acquired in the transaction to cut its stake to below 20%. Intuit – figures, page seven – also warned it expects a lower revenue growth rate but it does see a modest improvement in operating margin during fiscal 1997. It expects to report operating losses for the fiscal 1997 July and October quarters. It also plans to open up its software products for direct access to the Internet, in moves it says are designed to accelerate the exchange of financial data between banks and their customers.
