Multiple million dollars in tips still unaccounted for as B.C. restaurants demand answers from app

Many hospitality businesses across B.C. are dealing with lost tips as an app that distributes that money is malfunctioning.

One of the affected business owners is David Duprey.

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For the past couple of years, he has been using an app called “Everyday Payments” to distribute tips to his employees.

But on Jan. 28, his digital wallet was suddenly empty. $14,000 of his employees’ gratuities vanished.

“We do not have any info, we do not know what is going on, and they got all our money,” Duprey, owner of The Narrow Group, said.

Duprey paid them back out of his own pocket, but that money represented critical cash flow for his businesses.

“Having that disappear, it’s just astonishing. Like it was just completely unexpected, and we weren’t ready for it,” he said.

Two weeks later, Everyday Payments has yet to return the money or provide any answers.

Duprey is far from the only one. Industry representatives from Alberta, Ontario, and even Nova Scotia have all said they are aware of businesses that have been left high and dry.

But B.C. appears to be the worst hit.

“I know a group that has lost $1 million, another group that has lost $500,000, I found out today and a group that has lost $700,000,” said Ian Tostenson, CEO of BC Restaurant & Foodservices Association.

“It’s over $2 million right there. And then there is a whole bunch of hundreds and hundreds of people that have lost $8,000, $5,000, and $12,000.”

The app is jointly managed by Everyday People Financial Corporation and XTM Inc.

Two Canadian financial technology companies are based in Edmonton and Toronto, respectively.

In the two weeks since the money’s gone missing, neither company has been able to explain where it has gone.

XTM initially put out a press release blaming Everyday People Financial for a tech snafu before issuing a correction.

XTM’s share price dropped

Then, Everyday People Financial told CityNews that all responsibility for the money falls on XTM, and then XTM said nothing at all.

Tostenson, however, says he was able to get the CEO of XTM on the line last week.

“The first thing that came out of her discussion was that she’s very stressed. Very stressful situation, which indicated to me that they weren’t in control of the situation,” he told CityNews.

“Clearly, this was a CEO who was in big trouble.”

“If it were my restaurant that no longer has the tips. I would certainly be very nervous,” said Douglas Cumming, professor of finance at the Stevens Institute of Technology School of Business.

Cumming is a finance expert, and he says XTM’s financial situation is concerning.

“They are carrying a lot of debt, about $11.45 million in debt. XTM’s share price has gone down to 1 penny, so there’s not really any room for it to be possibly lower.

The price has since dropped to half a penny.

The Bank of Canada, which oversees regulations, says it’s aware of the issue and is looking into it, and at least one police report has been filed in B.C.

Hospitality businessperson Duprey says he is lucky his business is big enough to survive, but he doesn’t think everyone is in the same Boat.

“It’s the kind of thing that will make people go out of business,” he said.