Looking for alcohol payment processing solutions that won’t give you headaches?
The alcohol industry is booming. But here’s the rub…
Accepting payments in the alcohol industry is more difficult than it needs to be. Most payment processors see alcohol merchants as “high-risk” and reject them outright or overcharge exorbitant fees.
The solution?
Alternative alcohol payment processing solutions powered by new technology are making it easier than ever for liquor stores, breweries, and e-commerce retailers to accept payments with minimal fuss.
In this article, you’ll learn:
- Why alcohol businesses need special payment solutions
- What are the biggest pain points?
- How new technologies are solving these problems
- How to choose the right payment partner
Why Alcohol Businesses Need Specialized Payment Solutions
The reality…
Retail alcohol sales operate in a heavily-regulated environment. Age verification requirements, state-by-state compliance standards, and stringent licensing regulations create a regulatory maze that many payment processors aren’t interested in navigating.
That’s why alcohol merchants need a specialized merchant account for alcohol businesses from a provider that truly understands alcohol payment processing solutions and tech requirements such as 2Accept.
Think of it this way:
A regular merchant account is fine for a clothing store. But a liquor store, winery, or craft brewery is different. Chargebacks are higher. Fraud attempts are more common. One compliance mistake can shut down an entire operation.
Specialized alcohol payment solutions focus on these unique pain points.
The Biggest Payment Challenges for Alcohol Retailers
Operating an alcohol business is inherently risky. That risk creates many unique payment challenges. Awareness is the first step towards resolution.
High-Risk Classification
Most major payment processors such as Stripe and PayPal consider alcohol businesses to be high-risk.
The ramifications are significant:
- Higher processing fees (sometimes 3-5% per transaction!)
- Rolling reserves (withhold a percentage of your sales)
- Contractual restrictions and onerous account termination clauses
- Risk of outright account closure without warning
High-risk status isn’t a reflection of the business owner but rather of the industry itself. Age restrictions on sales, shipping requirements, and higher chargeback potential creates fear and uncertainty among banks and credit card companies.
Age Verification Requirements
Online alcohol sales add an extra layer of complication. How can you verify that the purchaser is of legal drinking age?
The stakes couldn’t be higher. The cost of failure is steep. Fines, license suspensions, and even criminal penalties can devastate an alcohol merchant’s business overnight.
The best alcohol payment processing solutions now integrate natively with age verification systems. Electronic signatures connected to verified bank accounts age-verify the purchaser before the transaction is allowed to complete.
Multi-Channel Complexity
Modern alcohol merchants don’t just sell in stores anymore. They sell across a variety of channels: brick-and-mortar locations, websites, delivery services, subscription clubs, etc.
Each requires seamless, intuitive payment processing. Consumers expect smooth checkout experiences whether swiping a card in-store, paying with a digital wallet online, or recurring ACH debits for a club membership.
Tech Innovations Solving These Problems
Thankfully the alcohol payment processing space is undergoing massive technological innovation. These innovations are changing the way alcohol retailers process transactions.
AI-Powered Fraud Detection
AI is making inroads into the world of payment security. Real-time transaction analysis by artificial intelligence systems uncovers suspicious activity that could be fraudulent.
According to Nasdaq, the global digital payments market posted a total transaction value of $11.55 trillion in 2024. With that much money moving through digital channels, fraud prevention is top of mind for most businesses.
Machine learning algorithms are able to predict and neutralize risks before they can be executed. By securing merchants and consumers on both ends, AI is leading the charge in secure payment processing.
Integrated Age Verification
Payment gateways are adding age verification directly into the checkout experience. Verification happens before the order begins the payment process.
This generates an audit trail to protect the merchant in the event of compliance audits. Some services even use blockchain-verified verification trails that cannot be retroactively altered or tampered with.
Mobile Payment Solutions
Mobile payments aren’t going anywhere. Digital wallets are driving an increasing portion of retail payments across all channels.
Alcohol merchants can leverage this trend with mobile card readers at festivals, tasting rooms, and for deliveries. Near Field Communication (NFC) technology allows for ultra-fast contactless payments that keep lines moving.
Automated Subscription Management
Automated recurring billing with flexible delivery options and secure payment storage is necessary for managing wine clubs and spirits subscription services. The best alcohol payment solutions have these tools built-in.
One-click reorder buttons and tokenized payment storage make repeat purchases easy for consumers while safeguarding their data.
How to Choose the Right Payment Partner
There are thousands of payment processors. Not all of them are well-suited to the alcohol industry.
Look for Industry Experience
Look for a processor with experience in the alcohol industry. These businesses will have internal processes to work with high-risk accounts.
Look for a long-time processor that has well-established relationships with alcohol-friendly banks. This is critical for your merchant account approval.
Evaluate Compliance Tools
The right processor will have integrated compliance features that allow you to automate as many parts of the age-verification and regulatory side of the business as possible.
Built-in tax calculations and reporting tools also help to reduce the time you spend wrangling with regulations.
Consider All Channels
Payment solutions must be omnichannel. The best solution will cover everything:
- POS hardware/software for physical locations
- Online web integration for e-commerce
- Mobile transactions
- Subscription billing
- Even contactless and digital wallets
Look for Transparent Pricing
Just because your business is high-risk does not mean you have to get gouged by your processor. Carefully review all pricing and look for no-nos: extra charges for long contracts, surprise fees for specific transaction types, etc.
Monthly month-to-month is always best. Don’t lock yourself into long-term contracts with big fees if the payment processor doesn’t perform.
Prioritize Fast Funding
Cashflow is critical for alcohol retailers. Choose a provider that offers next-day funding rather than the 2-3 days it can take with some other services.
Same-day funding is also available from some processors for a small premium.
Key Takeaways
New payment processing solutions and innovations are opening doors that have been closed to the alcohol industry for decades. We’re finally getting the specialized tools we deserve.
Here’s what to remember:
- Specialized merchant accounts are required for the unique challenges of alcohol businesses
- Age verification and fraud prevention tech is built directly into payment solutions
- Mobile payment solutions are a must-have for the modern alcohol merchant
- Compliance-friendly processors with transparent pricing are easiest to work with
The alcohol retail industry is changing. Those that adapt to these payment innovations will fly past those stuck in the past using legacy solutions.
Finding the right payment processing solution isn’t just about being able to take credit cards. It’s about having a platform for growth in a rapidly digitalizing economy.
