{"id":482886,"date":"2026-02-18T11:27:10","date_gmt":"2026-02-18T11:27:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/482886\/"},"modified":"2026-02-18T11:27:10","modified_gmt":"2026-02-18T11:27:10","slug":"a-payment-platform-was-supposed-to-make-restaurant-tipping-easier-then-millions-of-dollars-disappeared","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/482886\/","title":{"rendered":"A payment platform was supposed to make restaurant tipping easier. Then millions of dollars disappeared"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Eric Griffith, owner of Alta Bistro and Alpha Cafe, in Whistler, B.C., on Feb. 12.Alia Youssef\/The Globe and Mail<\/p>\n

An alert popped up when restaurateur Eric Griffith opened his digital wallet on Everyday Payments, the platform he used to distribute gratuities to his staff, late last month.<\/p>\n

It informed him of a withdrawal from his bank account: three times the amount he had authorized the payment provider to take, Mr. Griffith alleges. Between Alta Bistro and Alpha Cafe, his two businesses in Whistler, B.C., Mr. Griffith was out roughly $14,000 \u2013 just as rent was coming due.<\/p>\n

\u201cI was like, what? I didn\u2019t ask for that. \u2026 I don\u2019t want that much money in that account,\u201d he said.<\/p>\n

Then he noticed something even more troubling. Transaction history indicated that before the triple withdrawal, the tip-pooling service, which is jointly owned by Toronto-based XTM Inc. and Edmonton-based Everyday People Financial Corp., had allegedly taken all of the cash \u2013 about $4,500 \u2013 that had been sitting in Mr. Griffith\u2019s digital wallets.<\/p>\n

A similar situation was playing out at restaurants and other hospitality businesses across the country, according to industry associations.<\/p>\n

Ian Tostenson, president and chief executive officer of the British Columbia Restaurant and Foodservices Association, said he\u2019s calculated at least $10-million in losses after speaking with some 40 or 50 restaurants. Most are in British Columbia but he\u2019s received complaints from businesses in Alberta as well. <\/p>\n

Former exec of fintech linked to missing restaurant tips alleges CEO was \u2018misleading users\u2019<\/a><\/p>\n

One large restaurant group is out about $1-million; another is missing $300,000, according to Mr. Tostenson. At least 10 craft brewers in B.C. have also been affected, he said.<\/p>\n

Tony Elenis, president and CEO of the Ontario Restaurant Hotel and Motel Association, said he has spoken with a handful of affected restaurants, including a large chain. And the Restaurant Association of Nova Scotia has advised its members of a growing number of reports of \u201caccount discrepancies\u201d and \u201cdelayed access to funds\u201d from restaurant operators using the platform.<\/p>\n

The situation has sparked investigations by the B.C. RCMP as well as the Bank of Canada, which began supervising payment service providers in September, 2025. On Tuesday, the central bank issued a temporary order barring XTM from performing any payment activities, saying it has \u201cserious concerns\u201d that the fintech \u201cfailed to safeguard client funds in its possession.\u201d<\/p>\n

XTM is one of more than 800 payment service providers registered with the Bank of Canada, which is tasked with ensuring that the providers manage operational risks and safeguard client funds. Another 928 companies have applied for registration, giving the central bank oversight of more than 1,700 PSPs.<\/p>\n

Michael Liquornik, president of Fin-Serv Advisors Inc., questions whether XTM\u2019s registration should have been approved, given the issues disclosed in its financial statements.<\/p>\n

\u201cI would hope that this is a wake-up call,\u201d said Mr. Liquornik, whose firm advises payment platforms, fintechs and financial institutions. <\/p>\n

\u201cHow many others like this are out there?\u201d<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Mr. Griffith says his bank was able to reverse the withdrawal from his account before the money had cleared, but he has lost faith in Everyday’s platform.Alia Youssef\/The Globe and Mail<\/p>\n

Platforms such as Everyday Payments are designed to make it quicker and easier for restaurants to pay gratuities to their staff.<\/p>\n

The Canada Revenue Agency requires employers to withhold source deductions and pay premiums on what it deems controlled tips, but not on direct tips. Gratuities are considered to be controlled if they are collected and distributed by the employer, versus those that are given directly to the employee, such as cash left on the table at the end of a meal.<\/p>\n

The shift to credit-card payments has made matters more complicated. Enter \u201cgratuity facilitators\u201d \u2013 the industry term for Everyday Payments and its competitors.<\/p>\n

\u201cGroups like XTM have come in and created a model where the employer does not touch the tips,\u201d Mr. Elenis said.<\/p>\n

Employers prefund their digital wallets by sending money to the payment platform, where it is to be held in a custodial account as restricted cash. Employees can then cash out the tips they\u2019ve earned by transferring money from their employer\u2019s wallet onto a prepaid card.<\/p>\n

However, XTM\u2019s auditor, Abu-Farah Professional Corp., noted in a May, 2025, report filed with its client\u2019s public financial statements that the company had used \u201crestricted cash funds\u201d for \u201cits operating and program management, resulting in a potential liability to the Company.\u201d<\/p>\n

The Mississauga-based auditor also noted that XTM had incurred a net loss in 2024 and that \u201ca material uncertainty exists that may cast significant doubt on the Company\u2019s ability to continue as a going concern.\u201d<\/p>\n

And in its financial statements for the three-month period ended Sept. 30, 2025, XTM reported a \u201ctrust deficit\u201d of roughly $18.75-million, up from $13.96-million at the end of 2024.<\/p>\n

The fintech has also failed to pay more than US$200,000 owed to a Kansas staffing company after an August, 2025, U.S. court judgment, The Globe and Mail previously reported<\/a>.<\/p>\n

XTM, co-owner of payment platform linked to missing tips, owes Kansas staffing firm more than $200,000<\/a><\/p>\n

That company, Kansys Staffing Group, had several contractors doing software development for Denver-based payment company QRails Inc. before the latter was acquired by XTM in 2023, according to Ashley Ogren, who co-owns the Kansas firm with her husband. Ms. Ogren said XTM stopped paying her invoices when it took over.<\/p>\n

Marilyn Schaffer, XTM\u2019s chief executive, told Ms. Ogren that she was unable to make payroll on Nov. 28 last year and that XTM is \u201cso broke we use ChatGPT for legal,\u201d according to e-mails provided to The Globe by Ms. Ogren.<\/p>\n

XTM is also facing allegations from a former executive, who claimed that the company fired him after he complained to Ms. Schaffer that she was misleading investors and putting users\u2019 money at risk.<\/p>\n

Jason Giagrande was head of business strategy for the United States at XTM in 2022, when he started raising concerns about what he believed were \u201cillegal activities,\u201d according to a lawsuit filed in the U.S. District Court for the Southern District of New York in September, 2024.<\/p>\n

Mr. Giagrande alleges that Ms. Schaffer inflated the company\u2019s revenue in investor presentations, engaged in a form of market manipulation known as wash trading and failed to properly insure client funds, The Globe previously reported<\/a>. He cautioned Ms. Schaffer that her non-compliance would \u201ccatch up\u201d to the company and become a \u201cmajor issue,\u201d Mr. Giagrande alleges. <\/p>\n

XTM has denied all of Mr. Giagrande\u2019s allegations, calling him a \u201cdisgruntled consultant\u201d and stating in its response and counterclaim that he \u201cmilked tens of thousands of dollars from XTM while failing to perform his obligations.\u201d<\/p>\n

None of the allegations have been proven in court.<\/p>\n

In Europe, payment providers have been regulated since 2009. Canada\u2019s Retail Payment Activities Act came into effect last fall, following recommendations made by the Department of Finance in 2017.<\/p>\n

\u201cCanada is well behind some other markets in terms of its regulation of payments,\u201d Mr. Liquornik said. <\/p>\n

The situation involving XTM is the first time that the Bank of Canada\u2019s new supervisory powers over PSPs are being put to the test. <\/p>\n

In its temporary order, which lasts for 30 days and can be extended, the bank states that XTM\u2019s public financial statements confirm that it failed to safeguard its users\u2019 funds, resulting in a significant shortfall.<\/p>\n

\u201cThe Managing Director is concerned that a shortfall of this magnitude has caused harm to end users,\u201d the order states.<\/p>\n

In response to questions about XTM\u2019s registration, Akim Thibouthot, a spokesperson for the bank, said in a statement that it will register PSPs that \u201care in scope with\u201d the Retail Payment Activities Act and undergo a national-security review. <\/p>\n

\u201cThis is unlike a licensing regime, where a firm must demonstrate its compliance before it can receive a license and begin operations,\u201d he wrote. <\/p>\n

The case is a rare instance where the public has access to a payment company\u2019s financials, according to Mr. Liquornik, who said that most firms in this space are not publicly traded.<\/p>\n

\u201cDo I think that there\u2019s a large percentage of PSPs that are now registered that have dipped into client funds? No,\u201d he said. \u201cDo I think it\u2019s zero, apart from this one? No.\u201d<\/p>\n

Last October, XTM announced it had entered into an agreement whereby Everyday People Financial would take over managing and administering the gratuity platform.<\/p>\n

A spokesperson for Everyday People Financial previously told The Globe that wallet balances on the platform were adjusted on Jan. 28 to reflect the amount of actual cash available in the settlement accounts held in XTM\u2019s name.<\/p>\n

\u201cThis adjustment aligned displayed wallet balances with the funds then available in those accounts based on reconciliation data,\u201d the company said.<\/p>\n

Adam Atlas, a lawyer representing XTM, said in a statement to The Globe that the relationship between the company and Everyday People Financial is \u201ccomplicated.\u201d However, he wrote that XTM \u201cdid not itself initiate withdrawals from merchant bank accounts that were not authorized by the merchants themselves.\u201d<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

There are more than 800 payment service providers currently registered with the Bank of Canada.STEFANI REYNOLDS<\/p>\n

The missing tip money compounds the challenges facing a struggling industry, Mr. Elenis said.<\/p>\n

After emerging from a series of lockdowns intended to curb the spread of COVID-19, today restaurants are weathering further headwinds: high levels of inflation on food, rising labour costs and economic pressures that have prompted many consumers to cut back their spending. Nearly half of the country\u2019s restaurants are either losing money or just breaking even, according to a recent report<\/a> from Restaurants Canada.<\/p>\n

\u201cIn these times, it is hard to see something like what\u2019s happened with XTM,\u201d Mr. Elenis said.<\/p>\n

Some restaurant owners had to borrow money from their families or their banks to pay their employees the gratuities they were owed, Mr. Tostenson said.<\/p>\n

Going forward, business owners will need to conduct more due diligence when dealing with third-party providers that handle their money, he added.<\/p>\n

\u201cWhen you think about it now, we were \u2013 I was \u2013 being a little bit naive. \u2026 We\u2019re putting money into an account that we\u2019re not in control of. The first question you have to ask yourself is, what\u2019s securing that money?” he said.<\/p>\n

Some of XTM\u2019s customers have gotten their money back, but Mr. Tostenson said they\u2019re few and far between.<\/p>\n

Mr. Griffith is one of them. His bank was able to reverse the withdrawal from his account before the money had cleared. But, having lost faith in the platform, he\u2019s started the onboarding process at one of Everyday\u2019s competitors, another Toronto-based company called Atlas.<\/p>\n

\u201cI need to get moving with my business,\u201d he said. \u201cThis took up so much of my time in the last two weeks.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Eric Griffith, owner of Alta Bistro and Alpha Cafe, in Whistler, B.C., on…\n","protected":false},"author":2,"featured_media":482887,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[43,6347,44,41,39,42,40],"class_list":{"0":"post-482886","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-headlines","9":"tag-ne-i","10":"tag-news","11":"tag-top-news","12":"tag-top-stories","13":"tag-topnews","14":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/482886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=482886"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/482886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/482887"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=482886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=482886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=482886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}