Essays on Merchant Banking in Canada Case Study

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The paper "Merchant Banking in Canada" is a good example of a finance and accounting case study.   Small businesses have benefited from the growth in merchant banking in Canada. They are established to help in managing businesses finances and at the same time simplify the business planning process. Small businesses have in the past faced substantial challenges on how they manage their finances especially due to the uncertainty of the available payment platforms, but the evolution of credit and debit cards have made it easier for the business to record various transactions (Crawford, 7).

However, there have been cases where businesses have faced noteworthy challenges mainly relating to the breakdown of the point of sales, and the presence of hidden costs which has affected the revenue growth primarily to the small businesses. Small businesses incur operating costs of as high as 3.5% per transactions when the point of sales is used which increases the business costs thereby reducing the profitability (The Globe and Mail, 4). As a matter of fact, most of the small businesses have reported the breakdown of various gadgets and their inability to cancel various leases relating to the point of sales has further reduced their overall incomes.

With the use of the Code of Conduct for the Credit and Debit Card Industry in Canada, the Canadian government can control utilization and the implementation of the credit and debit cards to safeguard the interests of the small businesses if the implementation is done (Canada. ca, 2). Merchant banking has achieved major economic growth in the past, but at the same time, the sector has also experienced significant problems. The Canadian government controls the merchant's banks through the code of conduct that has been established (Crawford, 5).

Furthermore, the Canadian banking industry is guided by the code of conduct that governs the credit and debit card industry. Credit and debit cards primarily influence the operations of the merchant's banks and other retailers since it helps in defining their sales growth. The main aim of the code of conduct is to ensure that merchants are conscious of various costs related to debit and credit cards and this gives the merchants the ability to do their monthly focus and through this, they have the potential to monitor their revenues (Roseman, 4).

Besides, the code of conduct also helps the merchant's banks to plan for their future operations since they have the elasticity they need to ensure that they institute various measures to succeed in the market. At the same time, they have the ability to make sure that they can initiate payments options in the long run. Over the years, the code of conduct has enabled the merchants to carry out their operation in the right manner. The Canadian government has policies in place that helps in regulating the merchant industry especially in regards to disclosure and the scope operation.

This is meant to protect the businesses as well as the customers from fraudulent activities (Canada. ca. 1). Businesses in Canada has in the past reported hidden costs which have affected their operations and at the same time impacted their sales. Hidden costs are harmful to the business operations since they produce misleading reports and also they may influence the reputation of the merchant's banks. The element of trust is essential in the banking sector, and proper planning helps in allocating the right resources to various business operations.

On the other hand, the presence of hidden costs increases the business overhead (Dan Kelly, 2).

References

Canada.ca. (2017). Code of Conduct for the Credit and Debit Card Industry in Canada: Retrieved from https://www.canada.ca/en/financial-consumer-agency/services/industry/laws-regulations/credit-debit-code-conduct.html

Carlos Arango and Varya Taylor,(2009). Merchants' Costs of Accepting Means of Payment: Is Cash the Least Costly?: BANK OF CANADA REVIEW. Retrieved from: http://www.bankofcanada.ca/wp-content/uploads/2010/06/arango_taylor.pdf

CBC News. (Mar 2012). http://www.cbc.ca/news/canada/manitoba/businesses-hit-by-hidden-fees-from-credit-card-machines-1.1224694

CBC News. (Nov 2014). Visa, MasterCard agree to hold interchange fees at 1.5% for 5 years. Retrieved from: http://www.cbc.ca/news/business/visa-mastercard-agree-to-hold-interchange-fees-at-1-5-for-5-years-1.2822985

Crawford. T. (Jan 2016). Class-action suit over credit card fees charged to merchants gets green light in B.C. Vancouver sun. Retrieved from: http://www.vancouversun.com/business/Class+action+suit+over+credit+card+fees+charged+merchants+gets+green+light/9672908/story.html

Dan Kelly, (2014). Canadian Federation of Independent Business. Financial Post - column published http://www.cfib-fcei.ca/english/article/6459-credit-cards-are-stacked-against-small-business.html

Dan Ovsey (Nov 2013). Jack Dorsey may have found the key to successfully selling technology to SMEs — not selling to them at all. Retrieved from: http://www.financialpost.com/m/wp/tag/blog.html?b=business.financialpost.com/m/m/m/m/m/m/2013/11/04/jack-dorsey-may-have-found-the-key-to-successfully-selling-technology-to-smes-not-selling-to-them-at-all

Mark Taylor. (July 2013). Merchants hope new rules bring transparency to the payments industry. Special to The Globe and Mail: Retrieved from http://www.theglobeandmail.com/report-on-business/small-business/sb-money/will-the-new-payment-processing-rules-satisfy-merchants/article13021792/

Roseman.E. (Aug 2013). Spa owner won't pay $300 to leave Moneris: Roseman. Retrieved from: https://www.thestar.com/business/personal_finance/2013/08/23/spa_owner_wont_pay_300_to_leave_moneris_roseman.html

The Globe and Mail. (Feb. 2017). MasterCard Canada sets the new tone in fee battle. Retrieved from: http://www.theglobeandmail.com/report-on-business/small-business/sb-money/mastercard-canada-reaches-deal-with-small-business-group-to-lower-fees/article34038977/

The Globe and Mail. (Nov 2014). Top five online payment systems for your small business: Retrieved from http://www.theglobeandmail.com/report-on-business/small-business/sb-money/top-five-online-payment-systems-for-your-small-business/article21553705/

Tom DeSimone. 2017. Stripe Payments Review. Merchant Maverick. Retrieved from: https://www.merchantmaverick.com/reviews/stripe-review/

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