Everyday People, XTM sign management services deal

Executive Summary

• Everyday People Financial Corp. and XTM Inc. entered a five‑year Management Services Agreement (MSA) to transfer full operational, compliance and technology management of XTM’s Canadian card and digital wallet programs to an EPF‑controlled subsidiary, Everyday Payments Inc.
• The joint subsidiary will be owned 90 % by XTM and 10 % by EPF, with provisions for EPF to increase its stake up to 49.9 % based on revenue milestones and a right‑of‑first‑refusal on XTM’s shares.
• The integration is expected to eliminate XTM’s legacy operating costs, generate annualized revenues comparable to XTM’s 2024 $9.1 M net revenue within 12 months, and improve EBITDA and margin for both companies through cost efficiencies and shared revenue streams.

Key Details

• Agreement Terms
• Effective date: Oct. 22 2025; initial term of five years with automatic five‑year renewals unless terminated per agreement provisions.

• Everyday Payments Inc. will be the operating entity managing all Canadian‑network‑branded card and wallet programs.

• Ownership Structure

• XTM holds 90 % of Everyday Payments; EPF holds 10 %.
• EPF may earn additional equity up to a maximum of 49.9 % upon meeting specified net revenue milestones.

• EPF has a right‑of‑first‑refusal to purchase XTM’s shares in Everyday Payments at a mutually agreeable future date.

• Operational Changes

• EPF assumes full management and cost responsibility for the Canadian programs; XTM’s historical operating costs (technology support, compliance, reconciliation, program management) are eliminated.

• Integration will be executed with fewer than six incremental EPF team members, leveraging existing DC Bank Visa platform for regulatory compliance, daily settlement via trust accounts, and integrated processing.

• Financial Impact

• XTM’s 2024 net revenues: $9.1 million.
• Anticipated annualized revenue post‑integration: comparable to 2024 levels within 12 months, with higher bottom‑line profit share due to EPF cost absorption.

• Net revenue sharing defined as revenue after deduction of direct network, banking and processor costs only.

• Strategic Rationale

• Cost Efficiency: Immediate removal of XTM’s legacy operational expenses improves cash flow and profitability.
• Regulatory Compliance: EPF serves as the payment service provider of record, aligning with Bank of Canada oversight.
• Scalability & Speed: Unified processing enables faster client onboarding, real‑time settlement, and expansion into new verticals (hospitality, gig, franchise payroll).
• Revenue Synergy: Shared monetization across interchange fees, SaaS subscriptions, and lending programs enhances recurring income predictability.
• Technology Continuity: XTM’s proprietary wallet/app technology continues under the Everyday Payments brand with EPF handling ongoing management and compliance.

Notable Quotes

• “This partnership accelerates our strategy to deliver a unified, scalable and compliant payments infrastructure across North America.” – Gordon J. Reykdal, Executive Chairman, Everyday People Financial.
• “Partnering with EPF ensures that our programs operate on some of the most compliant infrastructure operators in Canada… This transaction is immediately accretive to XTM's financial performance.” – Marilyn Schaffer, CEO, XTM Inc.
• “The efficiency of this integration … translates directly to higher EBITDA and margin expansion for both companies.” – Tyler Hatch, Co‑CEO, EP Financial Services (Everyday People Financial).