Now that modern technology has allowed card machines to leave countertops and to be taken virtually anywhere, we’ve seen an influx of independent businesses and sole traders using card machines to their advantage.
But even though accepting card payments has never been easier, many sole traders are still closing themselves off from the technology – sometimes intentionally – to stick with cold, hard cash.
While accepting payments exclusively via cash can have its advantages, it does present several risks to sole traders as we move towards an ever-growing digital economy.
If you’re a sole trader and you’re yet to make the move to accepting card payments, here are a few reasons why you may wish to make the switch sooner rather than later.
Why sole traders should always use card machines with their customers
Clear and transparent payment data
Traditionally, sole traders who only accept payments in cash have offered paper receipts as proof of purchase or proof of services rendered. However, these paper receipts are prone to tampering and loss which can cause significant strife should an issue be raised on either side.
Also, if cash is the preferred payment method of choice for a sole trader, the customer could simply claim they have already paid for the service, when in actuality they’re trying to undercut the sole trader and save themselves some cash. With no clear digital record of any payment being made (or not being made), it is the word of the customer versus the trader.
However, with mobile card machines, sole traders can have the peace of mind that an indisputable record of all payments are all safely stored in their business bank accounts. A quick examination of their mobile banking app will prove without doubt whether or not a payment has been made.
In this case, accepting card payments not only guarantees payment will be received in the most clear-cut and traceable method possible, but it also prevents any blowback on the part of the trader of the above instance should arise – potentially avoiding countless underpayments and messy legal action.
The ability to track taxable income
Whether we like it or not, we all need to pay our fair share to keep the tax man happy. But for sole traders who only accept payments via cash, this can create a nightmarish situation when it comes time to tally up everything that has been paid and spent before the end of the tax year.
Not only do sole traders need to accurately list every cash payment on their own copy of the receipt, but they also need to safely store this receipt somewhere it will not be lost or damaged, until the time comes to put together a tax return. Losing several or just one of these receipts can result in an inaccurate tax return which could have greater consequences down the line.
But by utilising mobile card payments, sole traders can always have an accurate picture of their takings for the year and can easily use these figures to put together a tax return that is accurate down to the last penny. This also makes things a lot easier if the sole trader in question uses the services of an accountant.
Alternatively, there are some useful digital tools that help freelancers and the self-employed manage their finances in time for the end of the tax year – something which would be aided by accepting digital forms of payment.
Encourage more customers
While physical cash is still very much in use, with billions spent every year in currency, digital forms of payment like credit and debit card payments are undoubtedly more popular in the modern age.
In the UK, for instance, cash payments only accounted for 10% of in-person payments in 2022, while debit card payments accounted for an impressive 40% of payments – according to Statista. These figures seem to be reflected over the past few years as well, with cash experiencing a steady decline and card payments steadily rising.
Taking this information into account, it’s clear most people would prefer to pay using their credit or debit card (or contactless device) as it is far more convenient. This means that sole traders who do not accept card payments could be neglecting a significant portion of their audience who prefer to pay using these methods.
To attract the most customers possible, sole traders should adopt card payments using mobile card machines – alongside physical cash, if they wish – to maximise their potential takings.
Choose a reliable and experienced vendor for your card machine needs
If you’re a sole trader yet to get on board with accepting card payments, partnering with an experienced and reliable card machine vendor is your best shot at not only getting the best deal on your card machines, but also receiving the advice and support you need to make the most of your new technology.
