Question

C2. The Moose Hunt

Rod and Martha Nelson started The Moose Hut (TMH), a gift shop in Calgary, Alberta, more than 15 years ago. The Nelsons have capitalized on the tourist trade drawn by the Calgary Stampede, which is one of the largest rodeos in the world. The shop sells a wide range of Canadian-themed items to rodeo fans and other tourists who visit central alberta throughout the year. TMH's offerings range from inexpensive food items, such as pure Canadian maple syrup and smoked salmon, to much more expensive handcrafted gifts, including Inuit and First Nations artwork. The company's trademark product, the Moose Mug, is one of its biggest-selling items.

Many of TMH's customers return to the store whenever they visit Calgary. TMH's line of Canada Day Party Favours is especially popular with homesick Canadians who have moved to other countries, and TMH has been selling those products by mail order for the past several years. After reviewing the sales numbers for these mail order items, Martha has decided that it might be a good idea to expand the mail order operation and begin accepting orders through a Web site. Many of the store's items have a high value-to-weight ratio and would be easy to ship to customers around the world.

TMH currently accepts only checks dominated in Canadian or U.S. currency in its mall order operation; however, taking orders on a Web site will probably require the company to be more flexible in accepting multiple payment methods. Rod and Martha asked you to help them examine payment processing alternatives for TMH's new Web business.

To be acceptable, a payment processing method needs to handle all major credit cards, perform currency conversions, and be available to a Canadian merchant. Most important is that the payment processing method must be reasonably priced. The margins on most gift items at TMH are between 10 percent and 30 percent of the selling price, but the extra costs of shipping and handling items sold through the Web site reduce those margins by another 5-10 percent of the selling price. TMH would like to keep overall payment processing costs below 4 percent of the selling price, if possible.

Required:

1. Using the Web Links for this case, identify at least three payment processing options that might be suitable for TMH. Write a report of 400 words or more in which you describe each of the three payment processing options. Include specific advantages and disadvantages for each option. Prepare a one-page memorandum in which you make a specific recommendation to Rod and Martha. Include an explanation of the reasons for your recommendation.

2. Rod and Martha have heard about digital cash products such as bitcoin and are thinking about accepting Bitcons or some other digital cash from customers in person and online. Using your favorite search engine or the resources of your library, research this possibility and summarize your findings in a report of about 100 words or more addressed to Rod and Martha. In your report, outline the advantages and disadvantages to TMH of accepting one or more digital cash products as payments. Conclude your report with a recommendation based on your analysis.

Answer 1

1. Three payment processing options that might be suitable for TMH.

a) Elavon

One of the largest payment processors Merchant account provider . Best for Medium to large businesses.For a company as big as Elavon, they continue to innovate in the payment industry (eCommerce SDK and mobile POS system). In addition, their online reporting is competitive with industry standards. The Elavon support team is U.S-based and available 24/7 (it’s also available in 13 different countries).

PROS

No cancellation fee.

Has an informative website and seems to be transparent with rates.

CONS

Reports of withheld funds and termination of accounts.

They have many ISOs reselling Elavon services, which means there is often inconsistent service and rates.

b) Moneris

Merchant account provider.S uitable for Medium-large businesses or small businesses looking to expand quickly.Moneris offers an array of innovative payment solutions and services that keep up with industry trends. Moneris support is 24/7 via phone and includes a merchant direct secure message center. Moneris is active over social media and has a wide range of resources like training tutorials on YouTube, manuals, troubleshooting guides, and installation instructions.

PROS

Accommodates seasonal businesses for up to 6 months.

With partnerships with companies like Sage Accounting, RBC, and BMO, Moneris is able to provide additional services such as inventory and sales tracking capabilities.

Offers additional product offerings like office supplies.

CONS

Frequent reports of technical issues and billing problems.

Many reports of unexpected and excessive cancellation fees, hidden processing/monthly fees, and broken promises of refunds and rebates.

Proprietary POS means their software is only compatible with their hardware.

C) PayPal

Looked at as the default payment method for online business owners and eBay sellers worldwide. Best for smaller online merchants.PayPal services are very easy to set up and integrate with just about any shopping cart, accounting application, or shipping software. PayPal is very active on social media; they have a Twitter, Facebook, and AskPayPal account.

PROS

The sheer number of users means that every time you encounter a problem, you can probably find the answer via web search.

PayPal is widely accepted; it’s available in 203 markets.

CONS

They often hold/freeze seller’s funds and will not hesitate to shut down accounts if they suspect suspicious activity.

There is limited seller protection.

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Memo

To:             Rod and Martha Nelson

From:        XYZ

Date:        12-04-2018

Re:            Payment processing options

Message

With reference to the above data, on different options for payment processing you can decide and finalize one of these to be a suitable option for the same. Your payment process implementation will result into wider reach of your product and demand. Homesick Canadians who have moved to other countries, will cherish the moment spent in the country and will have easy aces to your product when required .Today we are into virtual world of social networking sites ,Facebook , twitter ,love to spend time on e-commerce websites ,buying &selling products .

All the very best for your future endeavours !

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2. Bitcoin –a digital cash products

Let’s consider Bitcoin to cite the advantages and disadvantages of digital cash products.

Freedom in Payment

• With Bitcoin it is very possible to be able to send and get money anywhere in the world at any given time.
• You are in control of your money with Bitcoin. There is no central authority figure in the Bitcoin network.

Control and Security

• Allowing users to be in control of their transactions help keep Bitcoin safe for the network.
• Bitcoin can be backed up and encrypted to ensure the safety of your money.

Information is Transparent

• With the block chain, all finalized transactions are available for everyone to see, however personal information is hidden.
• Bitcoin protocol cannot be manipulated by any person, organization, or government. This is due to Bitcoin being cryptographically secure.

Very Low Fees

• Currently there are either no fees, or very low fees within Bitcoin payments.
• Digital Currency exchanges help merchant process transactions by converting bitcoins into fiat currency. These services generally have lower fees than credit cards and PayPal.

Fewer Risks for Merchants

• Due to the fact that Bitcoin transactions cannot be reversed, do not carry with them personal information, and are secure, merchants are protected from potential losses that might occur from fraud.

Bitcoin Disadvantages:

Lack of Awareness & Understanding

• Fact is many people are still unaware of digital currencies and Bitcoin.
• People need to be educated about Bitcoin to be able to apply it to their lives.
• Networking is a must to spread the word on Bitcoin.

Risk and Volatility

• Bitcoin has volatility mainly due to the fact that there is a limited amount of coins and the demand for them increases by each passing day.
• However, it is expected that the volatility will decrease as more time goes on.

Still Developing

• Bitcoin is still at its infancy stage with incomplete features that are in development.
• To make the digital currency more secure and accessible, new features, tools, and services are currently being developed.

In Conclusion

Rod and Martha I would recommend you to choose one of the payment option suggested by me . Digital cash products are in their infant stage .People are just beginning to become more aware of it. In order for digital cash products to succeed, more people need to understand what it is and not let their preconceived notions distort the concept of digital currencies.