With its clients going increasingly mobile, Intuit Inc. knew it needed a point-of-sale payments solution for its cloud-based QuickBooks Online accounting product. This week, it announced it had found one, and unlike most payments products it has introduced in the past, this one wasn’t homegrown.
Intuit recruited Revel Systems Inc., a 4-year-old iPad POS startup based in San Francisco whose biggest deployment to date is the 700-store Smoothie King chain. Starting early next year, Intuit will offer QuickBooks Point of Sale powered by Revel Systems, which will allow users to run payments and automatically flow payments, inventory, sales, payroll, and customer data into their QuickBooks Online account.
The move may be a coup for Revel, but it could also catapult Intuit into retail markets where QBO had not been widely adopted. “We don’t really have a point-of-sale offering that works well with QBO today,” concedes Eric Dunn, Intuit’s general manager and senior vice president for payments and commerce. While some 700,000 users log on to QBO to run their books, these businesses tend to be concentrated in service industries.
With the Revel integration, Dunn says, QBO will be better positioned for multi-location businesses and clients who want to access their books from mobile devices at any location.
Intuit also saw a need for a point-of-sale solution as clients increasingly adopted QBO. “It wasn’t a core focus of QuickBooks to build a point of sale” when QuickBooks was primarily a desktop product, Dunn says. Now, “faced with increasing demand from QuickBooks customers for cloud capability, we had to link up [with Revel].”
Indeed, Dunn says Intuit is actively working to convert desktop users to QBO. “The desktop business is material, and there’s every reason to believe the QBO business we’re building with Revel will be as large [as] or larger than the desktop component,” he says.
The Revel integration may also help introduce Intuit more fully to the restaurant and food-store markets, where the startup has chiefly sold its mobile POS system. This, though, won’t likely yield big results immediately. “I don’t think Open Table needs to be looking in its rear-view mirror,” Dunn says.
Observers say both Revel and Intuit will likely benefit from the new partnership, but it may be a hard slog getting current clients to change. “Both accounting and POS platforms are sticky, meaning that businesses don’t change them out very often,” notes Rick Oglesby, senior analyst at Double Diamond Payments Research, Centennial, Colo., in an email message.
But he adds Intuit is on the right track. “As far as cloud-base POS systems are concerned, I think it’s critical for Intuit,” he says.
Intuit over the past year has incorporated outside mobile POS players through open application programming interfaces. These have included, for example, Square Inc., Vend, and Flint. The difference with Revel is that Intuit will be actively selling the startup’s platform as its POS solution, Dunn notes. “This will be our primary point-of-sale solution that we will be marketing to our customers,” he says.
Over a six-month stretch, Intuit investigated a number of candidates for this role before settling on Revel. Dunn says he was drawn to the company because its management team, coupled with new funding, “gave us confidence they would have a good product” now and in the future.
Dunn had “a slight concern” about the startup’s financial strength. But this was laid to rest last week when Revel secured $90 million in funding from Welsh, Carson, Anderson & Stowe, a New York City-based private-equity firm with a long history of investing in payments companies, including Alliance Data Systems, Card Establishment Services, and TransFirst.