Accepting card payments as a sole trader

One of the most important parts of running your own business is being able to accept payments. Figuring out which method of accepting sole trader card payments works best for your business can be confusing, especially if you don’t know the options.

In this article about accepting card payments, we’re going to explore:

• Point of service card readers
• Website check-out service
• Invoicing
• Accepting different types of cards
• Using your business current account

A point of service (POS) card reader is the classic method of accepting card payments. Any business that directly faces its customers (whether a food stall, or a hairdresser) can use card reader services to take payment. 

If you want to take payment with a POS card reader, there are many providers for you to choose from. Companies like SumUp and Zettle offer card readers for a set cost, and then charge about 1.7% to 1.9% per transaction (these can vary depending on your business, revenue, and card reader provider). The money is then deposited straight into your business account. 

Some companies offer cheaper alternatives that can take a set fee from each transaction, or a smaller percentage. These can lack the additional features of premium models, like wireless or 3G connection, BlueTooth connectivity, receipt printing and more. 

Most card readers accept contactless payment, a method that is quickly gaining popularity due to its convenience. If the card reader you choose accepts contactless, a sideways Wi-Fi symbol should appear during the transaction. 

These readers can work with apps or separate terminals that provide you with additional functionality and control. If a customer has a complaint or wants to return something, you are able to refund their money using the app. 

When choosing which POS card reader to use for your business, split your focus between the customer’s ease of use and the service you’re offered. Siding too far one way or the other can either cut into your profits, or give your customers an irritating payment experience.

If your business requires people to pay online, whether ordering a product or booking a personal trainer time slot, you may need to use a third party to process the transaction. Services like PayPal have widgets you can integrate into your website to provide seamless customer service. 

If trying to set up your own website and check-out section feels too complicated, you can use existing platforms like Etsy or eBay. Services like this allow you to start selling almost immediately, and rarely interfere with what you can or cannot sell. They also take out all the hassle of creating your own websites and payment portals.

An additional benefit you get by using a third party’s website is that your customers might feel a lot more secure. Placing an order over a trusted and well-known site typically makes people feel more comfortable than using a website they’ve never heard of before. 

Unfortunately, big hosting sites like this do take a larger portion of your earnings since they do more of the work. 

If you’re still building your brand, it can be a better idea to use a known platform, and as your business grows and gains popularity, develop your own digital storefront.

When you request payment via invoice, you’re able to include how you want to accept payment. Potential choices could be via a bank transfer, or your website’s online payment portal. 

If you can accept payment in different ways, you can include the other options on the invoice. By giving your clients various options to pay you, you’re offering flexibility which some clients may be very appreciative of. 

Requesting payment via a bank transfer makes repeat payments very straightforward. Instead of needing a physical card, you can receive payment directly from another account. To accept payments via bank transfer, you must provide your customer with your business’ account number and sort code.

While receiving the payment might be easier for you, writing and sending invoices can be time-consuming. If you’re trying to focus as much time as possible on growing your business, you may choose to use the Countingup app to help automate your invoices.

Some providers, such as Visa, Mastercard, or American Express, charge the business a percentage of the transaction when they’re used. While these charges only apply to credit cards and not debit cards, losing a portion of your earnings can be frustrating.

For this reason, some businesses choose not to accept payments from certain types of cards. The most commonly excluded card is American Express, but from January 2022 Amazon will stop accepting Visa credit cards.

If your margins are tight, this could be an excellent way to decrease your costs — provided that your customers have other payment options.

Consider opening a business current account if you haven’t already. Having a bank account specifically for your business will help you separate these transactions from your personal ones. As a result, you can more easily update your bookkeeping to track your earnings and spending. 

The Countingup business current account makes taking card payments simple. You can get paid faster and more easily by sending your customers a unique, branded payment link in just a few taps.

With additional features like invoicing on the go, receipt capture tools, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

Find out more here and start your three-month free trial today.