Some Manitoba servers are currently missing tips they’re rightfully owed as regulators raise concern over an online platform restaurants use to manage payments, an industry association says.

The Bank of Canada ordered XTM Inc. to immediately stop retail payment activities earlier this month, saying public financial disclosures show the company — which co-owns a platform that handles tip payments for businesses across the country — failed to safeguard users’ funds.

A revised order issued Friday allowed XTM to restart those activities, but only in a limited way under the supervision of a court-appointed monitor.

Some restaurants use third party companies to pay out gratuities because they don’t always have the cash on hand to pay out tips.

The Manitoba Restaurant and Food Services Association said about 15 to 20 of its members used XTM’s platform and have been impacted by the situation.

“We look at these people to be the professionals in that area,” association CEO Shaun Jeffrey said in an interview with Information Radio Friday.

“It’s very disappointing to hear that these kinds of situations are coming up. And people who ultimately … live on these gratuities, especially in our industry, aren’t getting their pay.”

Toronto-based XTM co-owns the Everyday Payments platform, formerly known as AnyDay. The platform allows employers to distribute tips to their staff through prepaid cards.

The Bank of Canada’s amended decision said the Ontario Superior Court had begun proceedings under the Companies’ Creditors Arrangement Act regarding XTM. The law allows large, insolvent corporations to restructure their finances.

‘There isn’t a lot of answers’

The fintech company disclosed in public filings last year it was required to refile some financial statements amid an Ontario Securities Commission (OSC) review.

XTM reported a $18.7 million “trust deficit” in financial statements for the three-month period ending in Sept. 30. The company faced an accumulated deficit of $71.3 million, according to the documents filed in December.

“I think the biggest challenge that we’re seeing in this situation is that there is no real transparency on the funds’ distribution and where they’re being held,” Jeffrey said.

“There isn’t a lot of answers.”

XTM CEO Marilyn Schaffer said in an email she can’t comment on specifics “for now,” but denied she or the company held the missing funds.

In a Feb. 19 release, the company said it had transferred control of its accounts to Everyday Payments’ other owner, Everyday People Financial Corp., on Nov. 30. It said funding practices had been “abruptly modified” without notice to XTM.

EPF said in a statement to CBC News Friday it launched a formal OSC complaint on Feb. 23, accusing XTM of sharing “factually inaccurate information.”

It said EPF was never the legal holder or custodian of merchant or cardholder funds, and did not manage money or settlement accounts associated with Everyday Payments.

EPF’s role is “strictly operational,” the company said.

Mackenzie Robb, general manager of Rudy’s Eat and Drink in Winnipeg, said she once considered using the third-party platform, but ultimately decided against it.

“We just erred on the side of caution and wanted to just keep doing what we knew and what was working for our staff, and it’s unfortunate that … these issues have occurred for others,” she said.

“Gratuities are income and they’re so important.… I hope that there’s a resolution in all this for the people that are affected.”

The Bank of Canada’s amended order limited payment activities only as required to let the Everyday Payments platform operate. XTM is still not allowed to direct any transactions or withdrawals from any trust accounts associated with the platform. The order was set to last for at least 30 days.