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In February, the Bank of Canada ordered XTM, a Toronto company that paid out tips to restaurant and hospitality workers, to halt its payment activities. Its financial statements had shown a shortfall of roughly $18.75 million in client funds. When trust breaks at that scale, every company in the category feels it.
Afshin Mousavian, co-founder and CEO of Actual, witnessed it while growing fast. The Toronto-based company helps restaurants and hotels divide and pay out staff tips, and it processed about $5 million in tips in 2024 and has processed about $160 million so far this year.
His biggest lesson? Trust has to be learned in how the product works every day.
The Whole Industry Faced the Same Question
Operators used to ask Afshin how Actual worked, what it cost, and how fast they could start. After February, they wanted to know how they could be sure the same thing wouldn't happen with their money. Some said they would rather go back to counting cash in envelopes.
Afshin’s team spent a full quarter responding, from retraining account managers to adding new slides to its sales deck.
Research Shows Similar Rivals Share the Damage
A 2006 Journal of Marketing Research paper ran three experiments on when one brand's scandal spills over to hurt beliefs about the whole product category and about competing brands. A 2016 study found that one brand's wrongdoing can lower how much consumers like competing brands and whether they intend to buy from them. It also found that the damage only reaches competitors customers see as similar.
Actual and its competitor did the same job for the same customers. From an operator's side, there was little to tell them apart until Actual explained the difference.
Afshin's Lesson on Building Trust Early
Afshin said building features to build trust "isn't the right way.”
Trust has to be part of how the product works from day one, and the whole team has to believe in protecting it.
He says this foundation helped Actual keep growing and winning customers through the fallout, though it’s still an uphill battle.
The Gaps Show Up Long Before the Headline
Customers found out about such collapses last. In May 2025, nine months before the Bank of Canada stepped in, XTM's auditor flagged in its public financial statements that the company had used restricted cash for its own operations. In the US, the payments middleware company Synapse filed for bankruptcy in April 2024. Regulators later alleged that its records hadn't matched its partner banks' records since September 2023. The shortfall was estimated at $60 million to $90 million.
In both cases, a customer asking "where is my money right now?" would have found the gap before a regulator did. That's the question Afshin's own customers started asking in February.
As a founder, you can ask it of your own product first. Where does customer money or data sit today, who can touch it, and what happens to it if the company shuts down? If anyone on the team struggles to answer plainly, you've found your gap.
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📣 Which part of your product doesn't need to be yours?
Jason Goldlist, CEO of Venue, answered that early. He handed payments to Stripe, including compliance, onboarding, and payouts, and kept his team focused on building the best product for artists. Venue now does $40M+ in annual GPV.
On October 15, Jason joins Laura Collinson (Jobber) and Lauren Garcia (Stripe) at Stripe's SaaS Platform Exchange in Toronto to talk about making those calls.
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