Running head: CASE STUDY - ASSIGNMENT 1

Case Study - Assignment

Ratan Saxena – 301091306

Carren Ann Daguman – 301044846

Naval Arora - 301063472

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Jessica Diaz - 301005667

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Professor - Andrea Thompson-Facey

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rs e Centennial College – Progress Campus
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 CASE STUDY - ASSIGNMENT 2

Case Study - Assignment

PAD runs a fairly high-margin business given that it is positioned at the ‘luxury’ end of the

market and commands a significant premium for its items and for the Palate-Able Delights

‘experience’. Should PAD absorb some incremental costs in exchange for added security,

and opt to stay with traditional trade payment and financing systems? Is a confirmed

documentary letter of credit still the best option for PAD?

In this competitive market in which every second market changes with technological

upgrading, the company must open its arms to every payment system. As a result, Pad should opt

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for some other financing method because too much reliance on single traditional method will not

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attract more customers in this competitive market. To succeed in expanding its business to gain

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the income they need to invest in the security system for payments, the company will have
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to comply with the proverb 'higher risk than profit’.

The answer to the second question is yes, the safest option is to affirm the letter of credit ,
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because it offers a promise of payment (by guarantor). Firstly, because PAD is dealing with a
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product which is highly perishing commodity, both PAD and its consumers are confronted with a

specific challenge, which implies that the transit insurance sector, such as UPS Capital and
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Export Development Canada, plays a major role in mitigating the possibility of failure of goods

due to detractive shipping issues including delays, mismanagement and other problems. The high
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margins and position of PAD in a luxurious, niches market means that the cost of insurance in
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exchange for the required safety should be absorbed. With respect to trade payments, there is a

significant risk of failure to pay, given the potential order size up to $150,000. However, it is also
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important to note the considerably varied sizes of PAD customer service plans, which range from

relatively small to very large. This indicates that a differing payment and therefore the security

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 CASE STUDY - ASSIGNMENT 3

and cost levels are guaranteed, and PAD seeks to define its best payment method and is

fascinated by both non-traditional and online payment options such as PayPal.

How well-suited is PayPal, or some variation of online payment solution, to the PAD

business and model?

The situation in the case presented, we recommend that PAD should adapt a flexible
payment system such as PayPal or other online payment solution is suitable to PAD Business
structure. The PAD target market is top-quality which preferred like latest modes of payment,
whether it is in terms of monetary transactions. The main goal of PAD is not to cause any
inconvenience to their customers and strengthening the security of its transaction is pitch on. The
company plans to serve variety of customers ranging from smallest scale up and orders up to $
150, 000. Moreover, PayPal is easy, customer-friendly, fast and reliable to customers and it will
be useful for the company to improve its business online. This provides the convenience to all

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customers.
In terms of the cost, Business Merchant account perspective the PayPal is one of the

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economical option available. Where there is no membership fee required and depends on
payment forms such as sales in Canada pay 2.9% + $0.30 CAD per transactions. In PAD’s

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customer security, it will give the verification of funds deposit by their PayPal account. This
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system is secured we still can’t control other risks involved such as fraud however it will not
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affect the customer’s account[ CITATION Pay20 \l 4105 ]. As the company growing, it is more
plausible to engage new payment system to determine its flexibility in every customer.
What are the pros and cons related to traditional bank-provided trade finance, and open
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account solutions? Do non-bank providers offer a credible alternative?

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Non-bank providers Non-bank providers are: GE capital, UPS Capital, Investment banks,

hedge fund managers and Export Development Canada [ CITATION EDC20 \l 4105 ]. In this
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case show a credible alternative because PAD has just concluded an exclusive logistics contract,

offers trade finance solutions to small business customers, together with its supply chain
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solutions suite. Also, PAD suggest another payment method: PayPal[ CITATION Pay20 \l 4105 ].
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It is like a transfer money from one country to another. However, installments between parties

through online exchanges. Since is an online installment.

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Traditional Bank[ CITATION EDC20 \l 4105 ]:

Pros Cons
Wealth managers and Credit limit

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 CASE STUDY - ASSIGNMENT 4

investment
Locations and ATM Low interest or not interest
Cash deposit Fees

Open Account[ CITATION EDC20 \l 4105 ]:

Pros Cons
Used in USA and Canada Delay payment
Provide security to one party Additional cost for products in
case the shipment no arrives in time
Used based on trust Payment long term

What is your recommendation to Palate-Able Delights?

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My recommendation to PAD (Palate -Able Delights) is that they should include more

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payment options, because everyone does not use the same online payment methods as pay pal so

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PAD should add few more like Google pay, Amazon Pay and apple pay. Even though Pay Pal is
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one of the safest among all, but everyone does not use it, so PAD needs to add more options for
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ease of consumers. Like in India people use Paytm rather than Pay Pal so consumer should not
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face problem in payment methods. These payment options are also safe and secure like pay pal.
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For more PAD can research in countries in which they’re exporting that which online payment
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method is most used by people and secure in that region, because every country has different
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preferences of people[ CITATION Sea1 \l 4105 ]. It is also seen that if consumer have problems

with payment method or they find it difficult, people drop the product while checking
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out[ CITATION Hos20 \l 4105 ].

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 CASE STUDY - ASSIGNMENT 5

References

EDC. (2020, May 02). The pros and cons of different payment terms. Retrieved from EDC:

https://www.edc.ca/en/article/different-payment-terms.html#:~:text=Open%20Accounts,-

If%20you%20offer&text=Strengths%3A-,Weaknesses%3A,before%20you%20agree

%20to%20it

Host Gator. (2020). Retrieved from https://www.hostgator.com/blog/online-payment-methods-

ecommerce/

Paypal. (2020, July 13). Paypal. Retrieved from Paypal: https://www.paypal.com/ca/for-you/fees

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Search Engine Journal. (n.d.). Retrieved from https://www.searchenginejournal.com/most-

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popular-online-payment-solutions/355014/

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