By Lisa Thompson
OTC:XTMIF
Imagine having a job where you got paid every day instead of once a week or once every two weeks. Even better, imagine that the money you just earned automatically appears in your account ready to spend. Like magic, a text informs you that your money has arrived and has been loaded into your wallet. The app-based mobile wallet, combined with the card, gives a total picture of what you earned, what you spent, and where. For customers of XTM (OTC:XTMIF) who are using its Today solution, that is a way of life for their employees.
In the hospitality industry today, there is vicious competition for staff. The on-again-off-again shutdowns by governments due to the pandemic closed, and often shuttered, many restaurants. Staff moved on to other occupations, many never to return. The workforce has soured on an industry where the government can change the rules. XTM’s solutions offer employers not only savings for their operations but a powerful competitive difference in hiring. Not surprisingly, the staff would prefer to get their payout at the end of each day rather than wait.
Interestingly in Canada, where XTM is located, restaurants still pay out tips in cash despite few customers using cash. This frequently requires trips to the bank or a safe by management, calculating the amount owed, counting money, and stuffing envelopes all of which require labor and effort costing the company money. Today, a payment distribution platform replaces all this effort at considerable savings.
One of XTM’s large and early customers is a large chain that has had much success using its Today Platform. It is a sizable company comprised of more than one chain and has more than 7,000 employees. It is positioned as a premium casual dining chain and has locations in Canada and the US. It has been a customer since 2020 and is using XTM’s Today in all of its locations both in Canada and the US.
This customer estimates that it will save $3.5 million per year using XTM’s solutions. Since XTM makes its money mostly from a cut of the interchange fees paid out by credit card companies, its main solution—earned wages paid through mobile wallets, is offered to hospitality businesses for free. Even free is scary, since any change to the business operations of a restaurant is a risk as it operates in real-time at lightning speed, and any disruption could ruin an operation.
In the chart that follows, the customer calculates its return on investment from using Today on a per-restaurant basis. Although the software and service are free, to start using the program, the restaurant had to pay to buy each employee a card. This is the only cash cost to starting up with XTM. In its calculation this cost was between $6 and $7 per card for a total of $636 per restaurant, implying its average restaurant has approximately 75 employees who receive tips. It then had to have someone in accounting provide the required information to XTM to onboard and invite employees to the platform, which is estimated at $132 in man-hours costs.
Surprisingly the restaurant can save $32,500 a year in the cost to recruit employees, train them, and then onboard them to a traditional system.
There are other monthly cost savings from not having to provide tips by stuffing envelopes with cash. This includes the labor involved for the general manager to get cash—from the safe or the bank, of $5,980 per year. The legacy method also leads to “lost tips” from the use of cash which opens the process to errors or fraud. Employees might dispute what cash they were paid and there can also be cash counting errors. This customer estimated that almost $3,900 in tips cash can go awry in a year. The automated process additionally saves the labor of $4,576 by not having to count cash, stuff envelopes and distribute them. Any errors also take time to resolve to lead to another $4,160 a year wasted. Finally, the company added in the cost of envelopes, and printing, and paper to the process--$780 a year.
The net savings were calculated to be $51,896 per year against a mere $768 startup cost. After five years, this customer could save $3.5 million running its 68 restaurants.
Recently, XTM announced that it can now offer Today Tip Calculator on a stand-alone basis. What this means is that customers do not need to use it integrated into their Point of Sale (POS) system. The integration pulls data straight from the sales system eliminating the need to enter any data. While having it integrated is labor-saving, not all hospitality locations operate the same way and some need the flexibility to change the inputs manually. XTM created the stand-alone version in response to a customer that requested this feature. This customer, a movie chain, has a restaurant in its theatres and wanted to allocate tips for sales made in the restaurant and not include the sales from popcorn (et al) sales in the lobby. The POS systems lumped them all together, producing the wrong allocation. By being stand-alone, Today can still be used in this scenario. We expect that this capability will help broaden the appeal of the product to verticals outside the restaurant market.
XTM is marketing Today in Canada and the US by calling on potential customers and focusing on chains, and attendance at restaurant shows. The most recent show at which XTM exhibited, was Restaurants Canada’s RC Show 2022 in Toronto. The show was a hybrid event with eight curated pavilions, hundreds of products and services, 250+ speakers across five stages, six competitions, and four networking events alongside a virtual conference platform broadcasting the live stage programming.
Today Booth at the RC Show 2022
The word on Today is also spread by staff that is using the system. Once a restaurant in an area uses it, others hear about it and may come to XTM to provide the same capabilities as the local restaurant with which they compete. As word spreads, we believe that many more restaurants and other hospitality entities will investigate Today. They will come for the competitive advantage and will be persuaded by the cost savings. Who doesn’t like saving money and having happy employees?
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