The First Provider Globally to Offer EWA Via
its Own Fully Vertical Tech Stack
XTM Inc. (“XTM” or the “Company”) (QB: XTMIF / CSE:PAID /
FSE:7XT), a Miami, Toronto, Denver and London-based Fintech creator
of payment innovation including fully certified Earned Wage Access
(EWA) through its QRails AnyDay™ product provided an update today
on the QRails acquisition and financing.
In March 2023, XTM began the process of negotiating and
acquiring QRails. XTM closed the acquisition XTM Closes QRails
Acquisition in August 2023. QRails, based in Denver, CO with
satellite offices in Atlanta and London, is a cloud-based,
API-driven issuer-processor. QRails is widely recognized for its
fully certified EWA flagship product AnyDay™ and is the first
provider globally to offer EWA via its own fully vertical tech
stack that powers its Earned Wage Access solution. XTM, as a
publicly traded company, faced complexities in bringing together
Canadian and U.S. businesses, resulting in six-months to close the
transaction.
“The QRails acquisition creates both significant opportunity and
risk for the company with the challenge of supporting the cost of a
processor infrastructure prior to its revenue generation,” said
Marilyn Schaffer, XTM, CEO. “We do believe the acquisition is worth
the stretch, setting us apart from every other competitor in the
Earned Wage Access (EWA) space with the ability to control user
experience, fraud mitigation, and processing costs, internally. Our
competitors spend generally in excess of $1.00 per user per month
on processing. XTM’s processing cost will be internal, controlled
and allow the company to realize profitability quickly, unsurpassed
by its competitors that use third-party vendors.”
Despite the clear advantages of the vertical integration, the
company has suffered devaluation as many micro-caps have in this
economy but continues to focus on the fundamentals for the
inevitable market come-back. The company continues the challenging
process of raising operating capital with Fintech funding facing a
40 percent year-over-year funding decline since 2021.i XTM is in
various stages of interaction with financiers in an effort to close
near-term on operating capital that will see the company through to
cash-flow positive (XTM Financing).
Enablers of Earned Wage Access present a significant opportunity
in the Fintech space, as the solution transcends all demographics
as the economy tightens and workers need access to their earnings
on-demand.ii
“QRails revenue launches in December 2023 with implementation of
a Fortune 50 client followed by another Fortune 500 client in quick
succession,” said Cary Strange, President, XTM. “The revenue
continues to grow and due to the advantage of owning the entire
tech stack, the cost of the processing infrastructure becomes
negligible, creating a favorable economic environment for XTM.”
The XTM AnyDay platform is the only fully-certified SAP EWA
solution SAP Offers AnyDay. QRails also has earned several industry
certifications such PCI DSS, SOC1 and SOC2. The XTM team will begin
to license the processor to process transactions for other Fintechs
and earned wage access providers thereby generating additional
revenue from competitive programs.
Highlights:
- On September 28, 2023 XTM announced the securing of an up-to
USD $90M debt facility for EWA lending. XTM Secures Debt Facility.
The lender approval came weeks after exhaustive due diligence and
audits of funds flow, financials, and the technology.
- Live in the UK/EU with 5 new UK contracts launching Q1/24.
- EWA RPU (Revenue Per User) is up 20% reflected in September’s
data.
- XTM and QRails’ B2B business model results in a low cost of
acquisition and the financial leverage of each integration. For
example, through one of its world-class single partners, the AnyDay
solution is to be rolled out to millions of prospective EWA
users.
- Only fully-certified SAP earned wage access provider. AnyDay is
one of only 3 EWA solutions in the SAP marketplace
(Worldwide).
- QRails has integrations with most of the major payroll
providers and time and attendance technologies, enabling it to have
a source of truth for hours worked and net revenue reducing risk
and ensuring a sustainable economic model.
- The power that the vertical integration provides in the payment
ecosystem sets it apart from competitors. Controlling the processor
enables competitive revenue streams, better control of payment
speed, the user experience and significantly reduced COGS. The lift
is heavy in the beginning, but well worth it once the volume is in
place.
- To date there has been more than USD$40M over four years
invested in the QRails’ fully industry certified processor
including PCI DSS, SOC1 and SOC2.
About XTM
XTM is a Miami, Toronto, Denver and London-based Fintech creator
of disruptive payment innovations including fully certified Earned
Wage Access through its QRails AnyDay™ product.
Founded in the cloud-banking space to further support businesses
to inspire their workforce in the hospitality, personal care and
services staffing industries, XTM provides on-demand pay for many
large brands including Earls, Maple Leaf Sports &
Entertainment, Cactus Club, Marriott Hotels and Live Nation. XTM
continues to innovate with further digital featurization to support
businesses to inspire workers to want to work more with shift
scheduling and call-outs, staff management, expense management,
in-app health and financial wellness; and gamified loyalty
programs. XTM's Today Financial™ is in use through POS and Payroll
integrations and directly through web-portals by thousands of
businesses and their workers across Canada and the United
States.
About QRails / AnyDay
QRails is a fully owned subsidiary of XTM. A cloud-based,
API-driven issuer-processor QRails enables payroll providers,
financial institutions and other global fintech companies to keep
up with the on-demand economy by delivering innovative digital
payment solutions to their employees. QRails helps companies
modernize and leverage payroll as a differentiator in attracting
and retaining talent all at low to no cost for the employee and
employer. QRails’ flagship solution, AnyDay™, is the first provider
to own their full tech stack that powers their Earned Wage Access
solution.
Founded in 2016, QRails, Inc., together with its U.K.
subsidiary, QRails Limited is SAP-certified, QRails also has earned
several industry certifications under PCI DSS, and SOC. For more
information, please visit www.QRails.com.
This news release contains “forward-looking information” and
“forward-looking statements” within the meaning of applicable
securities laws (the “forward-looking statements”), within the
meaning of applicable Canadian securities legislation, including
expected performance of XTM, the expectation that businesses with
which XTM does business or have committed to do business will in
the expected timeline, the continuing trend toward electronic
payment methods, the success of XTM’s intended geographic and
business expansions, the success of XTM’s new market relationships,
and the general conditions and revenues of XTM. Forward-looking
statements are statements that are not historical facts and are
generally, although not always, identified by words such as
"expect," "plan," "anticipate," "project," "target," "potential,"
"schedule," "forecast," "budget," "estimate," "intend" or "believe"
and similar expressions or their negative connotations, or that
events or conditions "will," "would," "may," "could," "should" or
"might" occur. All such forward-looking statements are based on the
opinions and estimates of management as of the date such statements
are made. These forward-looking statements are made as of the date
of this news release. Readers are cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the future circumstances, outcomes or results
anticipated in or implied by such forward-looking statements will
occur or that plans, intentions or expectations upon which the
forward-looking statements are based will occur.
The CSE has not approved nor disapproved the contents of this
press release, and the CSE does not accept responsibility for the
adequacy or accuracy of this release.
_____________________ i McKinsey: Fintech Growth ii FT Partners
Human Capital Management
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version on businesswire.com: https://www.businesswire.com/news/home/20231031441932/en/
For more information:
Marilyn Schaffer, CEO XTM Inc. 416.400.5629
XTM (TG:7XT)
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