Payment Processing for the High-Risk Alcohol and Liquor Industry

Businesses in high-risk industries often get the short end of the stick when it comes to payment processing. Whereas bigger companies that process a large volume of transactions may get a break on rates, sometimes alcohol and liquor retailers are shut out from opening merchant accounts completely. What are these businesses to do?

It is important to research payment processing options for high-risk industries to see how alcohol and liquor retailers can avoid pitfalls and higher fees and instead find options that level the playing field in the market. Working with a payment processing company with experience handling high-risk accounts helps business owners get the services and equipment needed to accept credit card payments moving forward.

What Makes My Business “High Risk”?

Businesses that sell alcohol, such as beer, wine, and hard liquor are typically labeled as high risk due to the nature of the industry. In addition to bars and nightclubs, liquor stores and online alcohol retailers are deemed risky by credit card processors for a number of reasons. For online merchants, there can be a risk of liability for processors due to chargebacks and canceled transactions. Additionally, these businesses are selling an age-restricted product and face the risk that underage patrons can use fake IDs to make a purchase in brick-and-mortar locations.

Banks are always assessing risk so they can get as close to a guarantee as possible that their partnerships with businesses are safe. However, this does not mean that there are no processing companies that work with high-risk merchants. In fact, companies like Leap Payments work directly with alcohol and liquor merchants to get the secure equipment and processing solutions they need to accept credit cards as payment.


Steps to Take Before Opening an Account

Prior to applying for and opening a merchant account with a credit card processing company, it is essential to ensure the alcohol and/or hard liquor retailer is in complete compliance with federal and state laws and regulations. This means abiding by the rules set by the Alcohol and Tobacco Tax and Trade Bureau (TTB), which applies to businesses that sell alcohol both online and offline. From there, companies will need to register with the Alcohol and Tobacco TTB and local and state governmental agencies, and also apply for a liquor license.

Preparing to Accept Credit Cards

Once you are ready to open an account, your payment processor will work with you to solve your individual challenges. For example, most retailers can quickly set up their system with a tablet-style solution that also assists with inventory management and ordering. Businesses that already have a POS system in place, such as restaurants and bars, will need processing equipment that seamlessly integrates with existing programs.

If you plan to offer online sales of alcoholic beverages, it is important to work with a processor that can help set up a secure gateway for processing credit card transactions over the internet. These transactions can be riskier because customers will need to enter card details manually.

The processing of payments is similar for both types of businesses, with transactions being cleared by processors and funds being deposited into accounts as soon as the next day. Research your prospective credit card processor to find out rates and understand the support services in place for high-risk businesses in the alcohol and liquor industry.

Receive Same-Day Funding for Your Account

When managing your business you need to ensure that tabs are being settled and you can continue to fund your operation in order to be successful. However, multi-day settling processes can keep businesses in the alcohol and liquor industry from having the fast and efficient access to funds needed to accomplish this. Your payment processing company should help you set up a merchant account to accept transactions and get funds deposited into your account as soon as possible so you can focus on operations instead of waiting to be able to pay suppliers and other bills.

With same-day funding for your merchant account, credit and debit card payments are quickly authorized and processed. This allows you to have access to funds without needing to wait for days or weeks for the bank to clear the money. As a result, businesses retain control of their finances and same-day funding helps maintain a steady cash flow for bars, restaurants, clubs and other companies.

In addition to making the process more efficient when accepting payment from patrons, same-day funding is also beneficial when completing business-to-business transactions. When money is sent between accounts, having a payment processing company on your side that delivers same-day funding comes in handy. Be sure to ask a prospective processor about same-day funding and other features for high-risk businesses.

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Leap Payments was established in 2007 to pursue the belief of a simply better way to help clients accept electronic payments. When it comes to processing payments in high risk industries such as liquor vendors, bars and night clubs, you need a processor that understands your business needs. Navigating the high risk arena can be tricky and working with an inexperienced and non-specialized company will leave you with poor service and possibly even a closed account, making you unable to process payments. When it comes to your business’ livelihood, why wouldn’t you partner with the best high-risk credit card processing company? Check out our website. 

This article was created in collaboration with the sponsoring company and our sales and marketing team. The editorial team does not contribute.