I know the real main characters in this story are Intuit and Credit Karma, but I think this is also great news for Square. Imagine free tax filing with option to get instant access to your refund if you choose to have it deposited in Cash App. Plus all kinds of data allowing Square to offer loans to individuals like they do for SMBs. https://www.pymnts.com/news/partnerships-acquisitions/2020/credit-karma-to-divest-tax-unit-to-square-in-7-1b-merger-with-intuit/
Why did square opt in for this deal? who would be interested in doing just square related taxes through this solution. Cash app is one of many cash related applications. What about my taxes from Robinhood and coinbase and whatnot. I felt Square got ripped off, intuit was never interested in the CKs tax solutions and it worked out for them. Please educate me if I am missing the point.
It's not just "Square related" taxes. Credit Karma allows you to file your complete tax return, including income from brokerages, work income, etc. That's why regulators didn't allow it to be included in the Intuit deal; the merger with TurboTax would have meant insufficient competition in the space. You're right that Intuit really has no need for CK's tax prep business because they already have a more popular one in TurboTax. But Square has a lot to gain from this. Seems like a good deal for all parties to me.
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I think this is more paying to keep Credit Karma out of the space, not acquire the team. It feels like CK needs the cash,, otherwise this is a very small price to pay for CK to sign away their right to grow market share in financial services, which only has a handful of potential offerings.
Why would Square care about keeping CK out of the tax prep space? CK Tax will be able to facilitate a lot of great integrations for Cash App. CK needed to divest from their tax prep business for regulatory approval of their acquisition by Intuit. I think that's probably part of the reason for the attractive price.
Maybe you're right, I just feel like the pricing doesn't make sense.
It's a good deal. Was thinking it must be Cash when the rumor initially surfaced. Great complementary offering.
There’s product and data synergies for Cash App.
The data will help them build alternative credit scores to lend on. Cashapp will do it right
Good news for square. It’s a great product with a lot of user
Awesome deal for Square. Free tax filing was hurting Intuit with only 2-4%growth y/y with Turbo. Now when Square will offer free tax filing it will again be painful for Intuit. Anything on top of free tax filing will be icing on cake for end users
Seems like a good deal - only $50M