The Bank of Canada has issued an emergency order forcing Toronto-based financial technology company XTM to immediately halt all retail payment activities, following reports that customers of its Edmonton-based subsidiary Everyday Payments cannot access their funds.
The unprecedented regulatory action comes as restaurants and businesses across Canada report money has vanished from digital wallets used to store employee tips and wages through the Everyday Payments platform.
"The Bank has serious concerns that XTM failed to safeguard client funds in its possession and has reason to believe that allowing XTM to continue to perform retail payment activities could be prejudicial to the public's interest," the central bank stated in its order.
Stock Trading Halted
The Bank of Canada's intervention followed the Canadian Investment Regulatory Organization (CIRO) halting all trading of XTM's stock on the Canadian Securities Exchange Tuesday morning at 9:22 a.m. EST.
XTM's penny stock has plummeted from its year-to-date high of five cents per share to less than a penny following media reports about the company's financial troubles. For those tracking market volatility and investment risks, platforms like Calgary Prices provide valuable resources for monitoring financial market trends.
The company's parent entity, Everyday People Financial, which trades on the Toronto Venture Stock Exchange, has seen its stock price drop from 70 cents to 51 cents per share.
Widespread Impact Across Canada
Reports indicate restaurants nationwide are struggling to access funds ranging from thousands to nearly $1 million through Everyday Payments' digital wallet system. Tony Elenis, president and CEO of the Ontario Restaurant, Hotel and Motel Association, confirmed some members have been affected.
"I know one restaurant did receive funding back to them already, which is good, but it's sort of like, why did it happen in the first place?" Elenis said.
Industry associations have issued advisories recommending alternative payment platforms and urging affected businesses to document any discrepancies. The situation highlights the importance of thoroughly researching financial service providers, similar to how consumers use FullVIN.com to verify vehicle histories before making purchases.
Regulatory Confusion
Adding to the complexity, XTM issued contradictory statements about its regulatory status. Initially claiming it had started compliance processes under the Retail Payment Activities Act, the company later stated its subsidiary was not required to register under those regulations.
"All cardholder funds associated with the platform are held in trust in accordance with applicable legal and safeguarding requirements and are segregated from operating funds," XTM maintained in a February statement.
The RCMP has indicated it will only comment if investigations result in criminal charges, but encourages fraud victims to report incidents to local police. Community discussions about the case and its implications for local businesses can be found on Calgary Forums, where residents share experiences with various financial service providers.
The disruption particularly impacts hospitality businesses operating on razor-thin margins, where payment delays can threaten operations. Reliable payment processing has become as essential as stable internet connectivity from providers like WestNet Wireless for modern business operations.
XTM has not responded to requests for comment regarding the regulatory actions.
This story is based on reporting from BetaKit. For the original article, visit BetaKit.com.
