The Government has lost approximately 2bn each year on account of cash payments made to tradesmen including plumbers, builders and cleaners, in return for their services. It has also been observed that cash payments are a contributing factor to tax avoidance, as there are no traceable transactions and the tradesmen have often failed to pay VAT or income tax by not declaring payments and keeping them 'off the books'.
mPowa, the new subscription free payment system that launched in the UK last month enables tradesmen to accept credit and debit card payments through their mobile phone, thereby offering a practical solution to the growing problems of 'off the books' transactions, and emergence of the hidden economy.
Dan Wagner, CEO and founder of mPowa, said, "The British Government's explanation of offering amnesty to encourage tradesmen to pay taxes is a stop-gap solution to the problem and does not tackle the issue in the long term.
"The government should encourage card payments so that there are measures in place to trace money coming in and out of businesses. There are millions of small companies who do not want to pay hefty monthly subscription charges and hence take cash payments, the government needs to invest in infrastructure to bring down the cost and allow them to trade and be paid on time." he added.
mPowa's service includes a mobile phone app and a reader which connects to a smartphone or mobile device, either by plugging into its headphone socket or via Bluetooth and enables customers to make payments on the go using their card. The mobile app is free to download on iPhone, iPad, Android, Windows and Blackberry devices, and functions as the control centre that accepts the payment.