Digital Transactions Authoritative, insightful and timely information for payments professionals
Intuit Inc. on Monday acquired the assets of Palo Alto, Calif.-based Payvment Inc., a 3-year-old vendor of shopping-cart and payment tools for merchants operating on social networks. Terms of the deal, which capped a series of developments that for some observers cast doubt on the market for so-called social commerce, were not disclosed.
The acquisition does not include Payvment’s base of some 200,000 sellers, which use the startup’s technology to manage orders and payments chiefly on Facebook storefronts. The vendor on Monday posted an announcement on its Web site saying it will shut down its service on Feb. 28, but that it had arranged with rival tech firm Ecwid Inc. for its merchant clients to “seamlessly” move their stores to Ecwid’s platform. Ecwid is based in Russia but maintains an office in Encinitas, Calif.
Payvment’s buy buttons will go inactive on Feb. 14, and merchants' access to their dashboards will cease two weeks later, the announcement said. The company’s deals site, Lish.com, will also shut down.
The post accompanies a statement from Payvment chief executive Jim Stoneham, which says the “Payvment team” is going to another, unnamed company. Later in the day, it developed that that company is Mountain View, Calif.-based Intuit. “Intuit has acquired a team of highly skilled developers who will be of great value to the social teams at Intuit,” the company says in a statement released late on Monday. Intuit would not make an executive available to discuss the rationale for the deal.
Vendor of the popular Quicken and Quickbooks accounting programs, Intuit has been active in payments in recent years. Early in 2009, it launched a smart-phone-based card-acceptance product, called GoPayment, months before the advent of the more celebrated Square Inc. service. And last year it acquired Aislebuyer Inc., a Boston-based startup whose technology allows consumers to receive deals and check out of physical stores on mobile devices.
Payvment made its play early for social commerce on Facebook, citing the massive network’s hundreds of millions of users. But lately Payvment’s shopper traffic has tailed off, and now the startup’s decision to shut down raises questions about the mix of payments and social networks, some observers say. Such sites are about “connections to people and to brands, but I’ve not seen a commercial Facebook page that was particularly compelling,” notes George Peabody, an independent payments analyst. “Every retailer is trying to build in connections to social, but you’re on an unproven foundation.”
Peabody speculates that Intuit wanted Payvment’s assets to build out its card-not-present payment capabilities. “You can’t be successful [in payments] unless you’re covering both card-present and card-not-present transactions,” he says, adding that a connection with GoPayment could help differentiate the product from services such as Square, which are strictly card-present. At the same time, the technology’s social-network capabilities could prove useful as an authentication system, he adds.
Monday’s news followed the departure last July of Christian Taylor, a Payvment cofounder and its chief executive. Taylor, who remained on the company’s board, left to pursue another startup opportunity.
Stoneham’s note on Payvment’s Web site, however, points to brighter prospects, hinting that it might be too early to draw any firm conclusions about social commerce. “It's been an honor to be part of the rise of social commerce, and we've learned many lessons along the way. It's still early days, and we expect to see great things from our incredible customers, our trusted partners, and the industry as a whole,” Stoneham’s post says.
