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Alcohol / Liquor

Retail and Wholesale businesses in need of an online alcohol merchant account are well aware of the difficulty in finding a reliable payment processor. Whether it’s a small brewery selling craft beers or a large wholesale corporation selling everything from wine to hard alcohol, challenges remain in finding merchant services. At WNY Merchant Consulting, we work with merchants to provide affordable and stable alcohol payment processing services for credit cards, debit cards, and ACH transactions.

Merchants in the online alcohol industry need to partner with a payment processor familiar with their needs. At WNY Merchant Consulting, we understand online alcohol businesses along with many of the problems and concerns facing the industry. Merchants that have an online beer, wine or hard alcohol companies are encouraged to contact our sales team for additional information about selling online. We would be happy to answer any questions or help you solve a problem with your current merchant services program.

Payment processors that accept alcohol businesses will have additional guidelines for the merchants to complete prior to account approvals. Most financial institutions will provide a list of the legal documentation along with internal documents required the payment card networks. Most general e-commerce merchant services companies are unwilling to take these risks and will not be able to properly set up this business model.alcohol merchant account

Going through a complete and thorough underwriting process extremely important and necessary to prevent problems in the future. Payment processors are required to register their alcohol businesses with the payment card association as a card-not-present merchant. This requires a yearly fee paid into the payment card networks to cover fees incurred through Visa/MasterCard and Discover. In addition to becoming registered, many processors will also require merchants to seek out a legal review by a 3rd party to ensure full compliance of all laws.

One of the final parts of the underwriting process is a hands-on review of the merchant website. Underwriters will confirm that the merchant is using an age-verification program to control the sales of alcohol and limit the chances of underage sales. Payment processors will also want to verify that merchants are charging customers sales tax during the checkout process, eliminating another potential legal issue.

Why are online alcohol sales high risk?

Due to the high government regulation of the alcohol industry, payment processors are increasingly reluctant to take chances of working with these businesses. The costs stemming from problems with alcohol merchants outweigh the benefits for many financial services companies. While merchants are required to be licensed while maintaining age-verification programs on their websites, most processors still won’t accept them.

Along with strict age restrictions, merchants are also held under the microscope when it comes to collecting sales tax. As one of the most important fractures of alcohol sales, payment processors can be affected if proper sales tax is not collected. In addition to verification of sales tax being charged in the shopping carts, many payment processors will have merchants complete additional documentation for legal purposes surrounding sales taxes.

Some of the alcohol resellers will offer customers a type of membership program that bills on a preset frequency. These types of business models generally experience higher than normal chargebacks and returns than one-off sales. When a payment processor reviews this kind of merchant account, these concerns will usually make it a higher risk business type. If the application is approved, many times it will require a reserve or sales verification.

Another potential issue that can prevent a payment processor from approving an alcohol merchant is due to the infrastructure and inventory required to properly sell and process orders. As a capital intensive business, merchants need to package and ship orders in a timely fashion. This concern has translated into problems for smaller merchants that are unable to process sales in the same manner as larger distributors.