A map with alcohol icons demonstrating EFT for wholesale transactions.

This blog was updated on 3/12/24.


For a few reasons. 

Forty-eight states in the U.S. dictate very specific payment terms for the wholesale of beverage alcohol to retailers. Half of the states require payment at the time of delivery (COD), and the other half allow wholesalers to extend limited credit terms. In nearly all the states, wholesalers are allowed to accept cash, checks, money orders, and cashier’s checks.  

The Problem With Cash, Checks, Cashier’s Checks, and Money Orders 

Although cash is permissible as a form of payment for wholesale transactions in most states, many beer/wine/spirit wholesalers have established their own policies to not accept cash. The reason being; alcohol wholesalers generally have specific days of the week and times of the day when they make deliveries to liquor stores, and thus can become easy targets for opportunistic criminals seeking to obtain cash. So, if the delivery transactions don’t go down in cash, the delivery driver becomes less of a target for armed robbery. For regulators, too, cash is problematic because it can’t be tracked. There’s no paper trail to prove that the licensee is the one who paid for the alcohol delivery.  

As for checks, the problem is three-fold. First, delivery drivers and retailers alike spend nearly 15 minutes per delivery trying to find the manager on duty and getting them to write a check. The wasted time is significant for both parties. Second, if the check is post-dated, not signed, or if the numbers on the check are transposed, the wholesaler is still on the hook for not collecting payment in full, as dictated by the state’s regulations (retailers are equally in violation in some states). In the case of checks being mailed to the distributor, there are the problems of lost checks and check interception/check fraud. The domino effect to regulators is having to enforce cumbersome delinquency rules for retailers who pay with a check that cannot be deposited and doesn’t effect a viable payment. 

The Case for Requiring Electronic Payments  

For the above reasons, several Control State agencies require electronic payments for spirits sales to retailers. Several independent beer wholesalers require electronic payments for deliveries to retailers. And most recently, the Michigan Liquor Control Commission required electronic payments for all beer/wine/spirits sales to retailers. All wholesale alcohol deliveries to retail licensees in Michigan (save for a few exceptions) are now transacted with electronic payments.  

With electronic payments as a standard, payments are made on time, in full, and with complete transparency. The wholesalers are in compliance with state-mandated payment terms, the retailers are in compliance with state-mandated payment terms, the risk for armed robbery is significantly decreased, and both parties gain a coveted 15 minutes back in their day.  

For regulators, the benefits of requiring electronic payments for wholesale transactions between industry tiers include clean and verifiable payment trails, a high degree of compliance with payment regulations, and decreased labor used to manage payment delinquency lists. 

An Invitation to Keep the Conversation Going 

Having worked in the wholesale tier of the industry for eight years, and then another ten years here at Fintech, I have seen and heard many approaches to this topic. I’ve also seen best practices for deploying electronic payment requirements, and I’ve seen….not-the-best-practices. 

Either way, I can assure you that NOW is the time to be talking about transitioning to 100% electronic payments for wholesale transactions because the industry is absolutely moving in this direction. I can also assure you that Fintech is far and away the industry leader in electronic payments in the alcohol industry, and we are exactly the right people to talk to.  

So, let’s keep the conversation going. You can reach me at [email protected]. 



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