Intuit boosts appeal to banks
Intuit will let one-time rival Meca Software customize its Quicken personal finance software for banks to brand under their own names.
The agreement is designed to make Intuit--which banks have feared would steal their customers by offering desirable personal financial services--more bank-friendly.
Under the pact, Intuit will let Meca customize its code for Quicken, the market-leading personal finance software, for individual banks, primarily to make the bank's name more prominent, link to the bank's Internet services, and beef up content in selected areas, said Paul Harrison, Meca's chief executive.
Quicken lets consumers receive and pay bills online, check account balances, receive statements, transfer funds between accounts, and link to brokerage houses to trade stocks and bonds.
Nicole Vanderbilt, analyst at Jupiter Communications, thinks Intuit moved to become more friendly to banks because of competition with Microsoft. Jupiter has urged banks to work with Microsoft and Intuit.
"We didn't feel like banks could compete with Intuit and Microsoft, so they had to bring them into their banking and Web strategies one way or another," Vanderbilt said, adding that Microsoft has been easier for banks to work with because it has lagged behind Intuit in unit sales.
Microsoft also offers cobranded versions of its Microsoft Money software, but it handles customization itself, rather than outsourcing, said Microsoft spokesman Thad Westhusing. For the five banks that have signed up, Money 98 directs customers to bank Web sites for transactions and marketing.
Microsoft handles the customization in-house in part because it sells server software and services that banks can incorporate in their Web sites. Neither Intuit nor Meca offer server products.
Meca, owned by seven major banks including Bank of America and Fleet Financial Group, has been in the business of customizing its own personal finance software, Managing Your Money, for specific banks. In the past, Meca has criticized Intuit harshly. Intuit had about 81 percent of the personal finance software market in November and December of 1997. Microsoft Money grabbed just under 15 percent.
"You can't ignore the fact that there are 10 million Quicken users out there, a core that is loyal to the software and their financial institution," Meca's Harrison said. "We and the financial institutions believed that this market needed to be addressed. We always thought Intuit had a good product."
Intuit will continue to concentrate on the retail version of its Quicken software, sold through retail channels, basically outsourcing the customization business to Meca.
"It comes down to a question of strategic focus," said Intuit's Enrico Roderick, director of desktop personal finance. "We don't have the processes or the mindset or the other things required to be managing a number of custom jobs for a number of financial institutions at the same time. It's not something we thought we do well."
"We are a toolmaker, and the way to be successful is to get people using our tools," Roderick added, saying the private-label program will expand Intuit's market.
"Clearly our niche in the market was the bank-friendly approach," Harrison noted. "What has changed is Intuit's willingness to have its software delivered to financial institutions in the model we believe in."
The two companies did not disclose financial terms of the deal, although Meca says it has the option of either paying a flat fee or a per-copy license to Intuit. Intuit said it will gain revenue as Meca sells more Quicken software to banks.
Meca will continue to market customized versions of Managing Your Money, but Harrison expects there will be great demand for Quicken.