A few days ago I wrote about the incredible growth of Intuit’s payments and payroll business.  Since FeeFighters is a comparison shopping engine for merchant accounts (and more financial services in the future) we are often asked about whether Intuit Merchant Accounts are a good deal. It’s actually quite hard to tell.

Intuit has two websites for payments – http://payments.intuit.com and InnovativeMerchants.com (this was a company Intuit bought a few years ago and formed the base for their processing business).  InnovativeMerchants.com has no pricing information and payments.intuit.com advertises a swiped rate of 1.64% and a non-swiped rate of 2.44%.  However, both those rate are for “qualified” transactions.   In many cases, less than a third of a merchants’ transactions qualify for the Qualified rate.

While it isn’t representative of everyone’s situation, a friend of ours showed us his Intuit Merchant Services bill, which is below.

A few comments:

1. Good – they stay true to their advertised pricing – 1.64% (Intuit has since lowered prices – at the time it was 1.72%) for card-present transactions and 2.44% for card-not-present.

2. Bad – the bill is formatted such that the overall amount of fees are hidden.  The top line on the statement only shows about half of the total cost $244.00, while an additional $342.95 was subtracted from this business’ revenue before being deposited in the bank.  In total the true cost of this merchant account is $586.95.

3. Neutral – While this is a tiered rate merchant account, so it is impossible to know exactly what the underlying interchange rates are.  However, we can make some pretty good guesses.  For example, the largest category for this merchant is Visa Mid-Qualified, with $11,150.00 of volume.  Contained within that category are transactions of several types.

First, Card Not Present Visa Debit, for which the interchange rate is 1.60% + 0.15.  Second, Card Not Present Visa Credit (Non-rewards) with a rate of 1.85% + 0.10. Third, Rewards2 with an interchange rate of 1.90% + 0.10.

His average ticket is around $1500, so the average cost for a Visa Mid-Qualified Transaction is $1500 * 2.44% = $36.60.  Meanwhile, the underlying interchange rate ranges between $24.15 (debit) and $28.60 (rewards credit cards).  So Intuit is raking off between $8-$12 / transaction, or between 0.54% and 0.84%. That isn’t the worst markup in the world, but business owners who find their credit card processor on FeeFighters.com usually get a markup between 0.10% to 0.50% (depending on size and industry).

So, overall, it’s not a great deal from a pricing perspective, but it’s not the worst either.  Also, Intuit Payments naturally has the best integration into Quickbooks and a reasonably good reputation for customer service. (Edit: We’ve heard from several people with bad experiences, so maybe not).

To compare your merchant account options in an apples-to-apples way, with easy to understand pricing you should use FeeFighters