Everyday People Financial Corp. and XTM Inc. Announce Strategic Management Services Agreement to Integrate Canadian Payments Operation

Executive Summary

• Everyday People Financial Corp. (EPF) and XTM Inc. have entered into a Management Services and Program Management Agreement (MSA) to combine their payment technologies under EPF’s Digital Commerce Bank (DC Bank) platform.
• A jointly formed subsidiary, Everyday People Payments Inc. (“Everyday Payments”), will be established to manage XTM’s Canadian network branded card and digital wallet programs, with EPF assuming full operational management, compliance oversight, and technology administration.
• The transaction is structured as a capital-light, profit-sharing model that is immediately accretive to XTM’s financial performance, eliminating XTM’s historical operating costs while generating high-margin recurring revenues for both parties.

Key Details

• Agreement Structure: The MSA has an initial term of five years from the effective date, with automatic successive five-year renewals unless terminated earlier.
• Subsidiary Ownership: Everyday Payments is owned 90% by XTM and 10% by EPF. EPF has the right to earn additional equity up to a maximum of 49.9% based on significant net revenue milestones, along with a right of first refusal to purchase XTM’s shares at a later mutually acceptable date.
• Operational Transfer: EPF assumes full management and cost responsibility for all Canadian network branded card and wallet programs. XTM’s historical operating costs (technology support, compliance, reconciliation, program management) are fully eliminated.
• Cost Efficiency: EPF will manage these programs with fewer than six incremental team members, leveraging integrated systems to achieve material economies of scale.
• Financial Impact: XTM’s 2024 net revenues were $9.1 million. The collaboration is anticipated to generate annualized revenues in line with historical results within twelve months of full transition, with a significant increase in bottom-line profit share due to EPF’s cost absorption.
• Revenue Model: Net revenue sharing is defined as revenue share after deducting only direct network, banking, and processor costs. The model requires minimal new headcount and no shareholder dilution.
• Technology & Compliance: All programs operate under EPF’s DC Bank Visa platform, ensuring regulatory compliance and daily settlement through trust accounts. XTM’s proprietary wallet and app technology continues to operate under the Everyday Payments brand.
• Strategic Benefits:
  • XTM: Immediate elimination of ongoing costs, improved cash flow/profitability, and ability to focus on cross-border expansion of gig-payments and earned wage access.
  • EPF: Unlocking high-margin recurring revenues and long-term value by combining XTM’s client base and technology with EPF’s regulatory, operational, and banking framework.

Notable Quotes

• “This partnership accelerates our strategy to deliver a unified, scalable, and compliant payments infrastructure across North America,” said Gordon J. Reykdal, Executive Chairman of Everyday People Financial Corp. “By combining XTM’s client base and technology with EPF’s regulatory, operational, and banking framework, we are unlocking high margin recurring revenues and long-term value for both shareholder groups.”
• “Partnering with EPF ensures that our programs operate on some of the most compliant infrastructure operators in Canada and that their staff are delighted by new features including lending,” said Marilyn Schaffer, Chief Executive Officer of XTM Inc. “This partnership enables XTM to focus on cross-border expansion of gig-payments and earned wage access across various new verticals. This transaction is immediately accretive to XTM’s financial performance and aligns with its focus on debt reduction, sustainable growth and profitability.”
• “With EPF managing all operational, compliance, and technology layers, XTM immediately eliminates significant ongoing costs while maintaining participation in future revenues,” added Tyler Hatch, EPF Co-CEO, EP Financial Services. “The efficiency of this integration, executed with fewer than six new hires, translates directly to higher EBITDA and margin expansion for both companies.”