Strategy

Newly minted

Newly minted

BY Charis Palmer

October 14, 2009

Personal financial management is back under the spotlight after Mint.com founder Aaron Patzer brokered a deal to sell the business to Intuit (owner of the Quicken brand) for US$170 million.

It’s a big number in the midst of a US recession, but Patzer prefers to talk different numbers – like the millions of people using Intuit’s existing products, including 10 million Quicken desktop software users, 24 million using Intuit’s TurboTax product (image right), four million small business customers, and eight million users of its online banking platform. “All of a sudden, we can bring Mint innovation to literally 40-50 million people. That’s pretty powerful, given we’re a 30 person company right now.”

Mint.com makes money by charging banks and other service providers a fee when customers decide to switch providers as a result of a savings recommendation from Mint.

In just two years, Mint.com has managed to acquire more than 1.5 million users, and is now sampling data from about two per cent of online US households.

A survey from Javelin Strategy and Research in August revealed eight per cent of online US households are using personal financial management tools offered through online banking, compared with five per cent from personal financial management websites like Mint, Quicken Online, Geezeo and Wesabe.

Independent streak
Patzer says Mint’s success has been driven by its independence, and predicts while personal financial management tools will continue to be rolled out by banks, independent providers will always have the ability to save consumers more money. “Banks will always be biased. They will always push their own products.” For example, he says, “We alert you to low balance fees and potential overdraft situations. Banks don’t do that, for obvious reasons.”

But Patzer acknowledges it can be difficult to get new users to part with their user names and passwords in order to take advantage of the full Mint offering. “There are people in the marketplace who are very reluctant to do that, and often it’s age biased, so for over 35s, it’s difficult. It’s taken them 10 years to trust online banking.”

Mint brings a younger demographic to Intuit, with the average Mint user aged 30. Sixty per cent of Mint users are male, compared with 85 per cent of Quicken desktop users.

Patzer says 60 per cent of people who use Mint have never used a personal finance tool before. The group is opening up budgeting to a new generation of users, and Patzer argues Mint can continue to do this at a greater rate than the banks. “Ultimately, I think we need to own the consumer mindshare – that’s really where the value is. There’s big value in a brand that’s objective and simple and easy.”

Last month, it was reported that Citigroup has been working with Microsoft, investing $5 million on developing a personal financial management offering designed to compete with Mint. Patzer says big brands like Citi or Chase will never be viewed as objective. “I know they think they’re innovative and they’re partnering with Microsoft, but they have too much history to fight of not being innovative.”

And, he says, banks will always face a challenge getting the best talent to help build the best platform. “No developer, programmer or user interface designer out of school or, say, Apple, is going to go work for Citi or Chase. They want to work for Google, Mint or Apple.”

The integration of Mint into Intuit’s large range of products is high on the agenda for Patzer, however, longer term there are plans to expand the Mint brand into other markets, including Australia. The UK and Canada are priority markets, but Patzer says personal financial management is easier to internationalise than most of Intuit’s other products. “Every adult in the Western world, and now the Eastern world, needs to manage money…needs to set a budget, needs to stay on top of their finances and needs to understand credit.”

Patzer is contracted to Intuit for three years, which means he has a long list of goals to achieve. “I’m 28 now. I’ll be an old man when I get out,” he jokes.