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On February 17, 2026, the Bank of Canada did something it had never done before under the Retail Payment Activities Act. It issued an immediate compliance order against XTM Inc., ordering the company and its affiliated entities, including the AnyDay platform, to cease all retail payment activity, effective immediately. It was the first order ever issued under the RPAA.
There was no advance notice and no wind-down period. It all just stopped.
For the restaurants and workers who depended on the platform, the impact was immediate. Tips and balances people expected to access were frozen, and programs that had been running smoothly went dark overnight. Ten days later, on February 27, the Bank issued a revised order that allowed XTM to resume activity under court-appointed supervision after it entered creditor protection. The temporary freeze eased, but the underlying lesson did not: for a stretch of time, funds people were counting on were simply out of reach, and a shortfall in end-user funds had already accrued.
While it is tempting to treat this as one company's problem, there is a broader lesson here and a question every business running a payment program should be asking: do you actually know how your payment provider is holding your money?
The answer to that question determines a lot about what happens when things go sideways.
The Problem Wasn't the Label: What Actually Happened at XTM?
Here is the detail that most coverage glossed over, and the one that matters most.
XTM was not some unregulated outfit operating in the shadows. It was a registered payment service provider (PSP) under the Retail Payment Activities Act, subject to Bank of Canada oversight. The compliance order was issued under that exact framework. In other words, XTM held the credential that the payments industry often treats as a mark of safety, and it still failed.
Through its AnyDay platform (more recently branded Everyday), XTM ran a tip-management service that let restaurant owners aggregate and distribute staff tips using prepaid cards. The business model made sense on paper. Workers want faster access to their money, and employers want a simple way to deliver it. XTM sat in the middle and facilitated it.
The problem wasn't the product, and it wasn't the absence of a regulatory license. The Bank of Canada's order stated that XTM had failed to safeguard client funds in its possession and that a significant shortfall in end-user funds had accrued. The Bank found that allowing the company to keep operating could be prejudicial to the public interest, which is why it skipped the usual process and issued an immediate stop order.
That is the part worth sitting with. Being a registered PSP under the RPAA did not, by itself, keep anyone's money safe. What failed was the thing underneath the label: how funds were actually held, separated, and protected.
The Real Difference: How Providers Hold Your Money
Most businesses evaluating a payments partner focus on the obvious things: features, pricing, integration complexity, support. Far fewer ask the question that actually determines what happens under stress: where does my money physically sit, and who can touch it?
That question matters more than any category label, because the labels can be misleading. "MSB," "PSP," "bank-grade," "banking infrastructure" describe how a company is registered or how it markets itself. They do not, on their own, tell you how your funds are held.
- A Money Services Business (MSB) is registered with FINTRAC, primarily for anti-money-laundering and financial-crime compliance. That registration says nothing definitive about fund custody.
- A payment service provider (PSP) under the RPAA is subject to Bank of Canada oversight of operational risk and end-user fund safeguarding. As XTM showed, a provider can hold this designation and still fall short of the safeguarding it requires.
These are not opposite categories. A single company can be registered as both at the same time. What actually protects your money is not which box a provider ticks, but how it structures custody underneath. There are broadly two approaches:
The XTM order is a live example of why that bottom row matters. The label was in place. The safeguarding was not.
Your Funds Are Only as Safe as How They're Held
If your payment program depends on a provider holding funds on its own books, then you are exposed, whether you realize it or not, to how that provider performs under stress. Your workers' wages, your disbursements, and your client funds are only as safe as the structure holding them.
By contrast, a model built on regulated banking custody separates client funds from the provider's operating risk. That separation is designed to persist even if the provider itself faces disruption. You work with a technology partner that plugs into regulated banking infrastructure, rather than one that acts as the financial institution itself and puts your money on its own balance sheet.
That is the point. Not the acronym on the registration, but where the money lives.
Questions You Should Be Asking Your Payment Provider
Most providers aren't on the verge of a compliance order, so the XTM situation isn't a reason to panic. It is a useful prompt to ask some basic questions about how your funds are actually protected. Whether you run a payment program today or you're evaluating providers, here are five worth getting clear answers to:
- Where are client funds held, and at which institution? The answer should name a federally regulated financial institution and explain the arrangement. "Within our system" is not an answer.
- Are client funds segregated from your operating capital? A provider that commingles client funds with its own operating accounts ties the safety of your money to its financial health. That is a risk you shouldn't have to carry.
- What happens to my program if you face a regulatory action or insolvency? It's an uncomfortable question, but ask it. A well-structured provider has a clear answer, and that answer is not "your funds are at risk too."
- How do you safeguard funds under the RPAA, in practice? Registration under the RPAA is a starting point, not a finish line. The XTM case is proof that registration alone doesn't guarantee safeguarding. Ask the provider to walk you through exactly how end-user funds are held and protected, not just whether they're registered.
- What does your banking partnership structure look like? Who are the licensed institutions behind the platform? How are funds actually held and moved? A reputable provider can walk you through this without hesitation.
None of these are gotcha questions. Any serious provider should welcome them and answer plainly. If the responses are vague or evasive, that's a red flag worth paying attention to.
Structure First: How Berkeley Approaches Payments Infrastructure
Berkeley operates as a payments infrastructure platform, the technology and integration layer that sits between your company and the banking system. We're not a bank and we're not trying to be. We're a bank-backed PSP built to work with fully licensed banking partners, not around them.
In practice, that means:
- Client funds are held at regulated financial institutions. When money moves through Berkeley's platform, whether that's a disbursement, a prepaid card load, or a mass payout, it's held at our banking partners, not on Berkeley's balance sheet. That separation is how the platform is built.
- Compliance is part of the infrastructure. Berkeley's platform includes built-in AML and KYC frameworks, immutable transaction ledgers, spend controls, and audit trails, the foundational features enterprise clients, financial institutions, and government programs should require before putting their name on a payment program.
- Registration is table stakes, not the whole story. Berkeley operates under the RPAA framework, the same one the Bank of Canada used in the XTM order. But we treat that as a baseline. What actually protects client funds is holding them at regulated bank partners, segregated from our operating accounts, and we can show you exactly how.
- Speed and safety aren't a tradeoff. One persistent myth in payments is that moving fast means accepting more risk. Berkeley's platform is designed to disprove that. We power real-time disbursements, instant card issuance, and mass payouts at scale, all running on banking infrastructure built to meet the requirements of the most risk-sensitive organizations.
The companies looking to move off platforms like AnyDay aren't just looking for a replacement. They're looking for a provider they can trust to still be running, and running cleanly, in two, five, and ten years. The features might look similar across providers. It's the underlying structure that makes the real difference.
Ready to Make the Move? Here's What to Expect
If your program has been disrupted, or if this situation has prompted a harder look at your current payment infrastructure, the natural next question is: how complicated is it to switch?
Migrating a payment program takes real planning. There are cardholder accounts to transition, banking integrations to set up, and compliance documentation to work through. Anyone who tells you it's a one or two day process is underselling the complexity.
What Berkeley offers is a structured onboarding process built on significant experience bringing payment programs across from other providers, or standing them up from scratch. A few things make the transition more manageable than you might expect:
- A single integration point. Rather than stitching together multiple vendors for card issuance, money movement, compliance, and reporting, Berkeley consolidates all of it into one platform, reducing integration burden compared to building or migrating to a multi-vendor stack.
- White-label flexibility. If your program is client-facing or worker-facing with your brand on it, that doesn't have to change. Berkeley's platform is built to sit behind your brand, not in front of it.
- Dedicated implementation support. We don't hand you API documentation and wish you luck. Implementation is a supported process with Berkeley's team involved from scoping through go-live.
The disruption caused by the XTM order is real, and we don't want to minimize it. But if it prompts your organization to move to infrastructure that's more structurally sound, that's a meaningful long-term win, even if the short-term transition is messy.
If you'd like to talk through your current setup and what a move to Berkeley could look like, get in touch with our team.
