Just a few days ago I authored an article about the persistent glitches within Intuit’s online payment system causing serious problems for customers. At the time of the article being written the problems had (supposedly) been fixed. Now those same problems are back and Intuit seems to be having a hard time wrapping its arms around what’s wrong and how to fix it once and for all.
The problems are manifesting themselves in all of Intuit’s online services for small businesses, including, but not limited to payment processing, payroll and messaging. This crippling outage has created massive amounts of productivity lost among Intuit’s millions of small business customers. Many are turning to alternatives to settle transactions, such as cash, checks or manual credit card transaction settlements (either over the phone or pushing them through later when the functionality is restored).
The questions I wrote about before must be echoed again, and now with a bit of table pounding. What is Intuit going to do to mitigate the chance of these now frequent outages from occurring in a way that complicates the everyday business operations of its key client base? Will those very same clients continue to use Intuit as a payment processor, or opt to instead use one of the many alternative merchant processors out there? Is Intuit going to provide some kind of fee holiday to make up for the inconvenience this has caused?
I’m now recommending shorting shares of INTU because I feel that the company does not have control of this situation and it is going to have an impact on their margins, the confidence of their customers and their ability to sell their online services in the future.
(Disclosure: The author does not have any positions long or short in INTU, but may be selling calls on INTU in the next week.)