California Department of Alcoholic Beverage Control

04/07/2025 | Press release | Distributed by Public on 04/07/2025 16:30

AB 2991 Guidance: Electronic Payments Between Retailers and Wholesalers

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Apr 7, 2025

AB 2991 Guidance: Electronic Payments Between Retailers and Wholesalers

This Industry Advisory summarizes some of the provisions in Assembly Bill 2991 (AB 2991) and responds to commonly asked questions about the new law.

Disclaimer: The Alcoholic Beverage Control (ABC) regularly archives industry advisories for transparency and historical reference. However, the advisories may not necessarily reflect the current state of the discussed statute or regulation. Please consult the statute, regulation, and/or an attorney before taking any action to ensure compliance with the law.

On January 1, 2026, AB 2991 (Valencia, Chapter 426, Statutes of 2024) will go into effect. This new law will require payments from retailer licensees to wholesaler licensees for alcoholic beverage deliveries to be made by an electronic funds transfer (EFT) in accordance with various requirements. These requirements are outlined throughout the new law, which include, but are not limited to:

1) The wholesaler must initiate the EFT through the withdrawal of funds from the retailer's bank account.

2) The EFT must occur by the expiration of the 30th day from the date of delivery.

3) Any costs related to the electronic payment services must be paid by the party that incurred the costs. Wholesalers cannot pay for electronic payment fees incurred by a retailer, and a retailer cannot pay for electronic payment fees incurred by a wholesaler, and service fees must be applied in an equitable manner to the licensee to match the services they receive.

The wholesaler licensee is designated with the authority to select the third-party payment processor used to facilitate the EFT transfer. Notwithstanding, a wholesaler and retailer may agree on the third-party payment processor, but if the parties are unable to agree, they must use the third-party payment processor used by the retailer as of July 1, 2025 to pay for wholesale alcohol purchase; and, if by July 1, 2025, the retailer does not use a third-party payment processor, the parties must use the third-party payment processor selected by the wholesaler.

Please note that there are specified exceptions for cash, check, or money order, including, but not limited to, temporary service interruptions of third-party payment processors, accepting payment following an EFT of insufficient funds, and others (See Frequently Asked Questions for more information).

In addition, wholesalers will have the ability to accept credit card payments in lieu of an EFT, so long as the retailer bears the cost of the transaction. It is at the wholesaler's discretion to accept credit card payment.

Wholesalers and retailers should work together to ensure compliance with this new law. For additional information, please refer to the commonly asked questions below.

Frequently Asked Questions

When does the new law take effect?

The law takes effect January 1, 2026. However, retailers should be aware that, in the event the wholesaler and retailer are unable to agree on a third-party payment processor when the law goes into effect, the parties may use the third-party payment processor used by the retailer as of July 1, 2025. If by July 1, 2025, a retailer does not use a third-party payment processor, the parties will then use the processor selected by the wholesaler.

What licensees must comply with the electronic payments mandated by AB 2991?

The new law governs payments from retailer licensees to wholesaler licensees for alcoholic beverage deliveries.

What is a "third-party payment processor"?

This bill does not define what constitutes a third-party payment processor, though it can be inferred that it is a party other than the wholesaler or retailer that is the payment medium through which the transaction occurs.

What is an "electronic funds transfer"?

An electronic funds transfer or EFT is the electronic transfer of money from one bank account to another via computer-based systems, either within a single financial institution or across multiple institutions.

What companies are considered third-party payment processors that perform EFTs?

ABC does not approve or sanction payment processor companies nor their systems that facilitate electronic payments. For this reason, if your wholesaler does not accept credit card payments in lieu of an EFT, it is important that the payment occur electronically unless done in compliance with the exceptions that allow cash, check, or money order.

The law states that the wholesaler must initiate the EFT through the withdrawal of funds from the retailer's bank account. What qualifies as initiating the transaction?

This is highly technical in nature and electronic payment systems may vary in their functionality. However, it is key the payment occur electronically.

What are the exceptions for when cash, check, or money order is acceptable?

  1. If accepting payment following an EFT of insufficient funds.
  2. If the retailer licensee holds an interim operating permit pursuant to Section 24044.5 or a temporary permit pursuant to Section 24045.5.
  3. During temporary service interruption of the third-party payment processor.
  4. During the first 30 days following the issuance of a license to the retailer licensee.

Is credit card considered an EFT?

For purposes of this new law, credit card is not considered an EFT. However, the law grants wholesalers the ability to accept credit card payments in lieu of an EFT.

Contact

Additional information may be obtained by contacting:

Alcoholic Beverage Control
3927 Lennane Drive, Suite 100
Sacramento, CA 95834

Email us at headquarters@abc.ca.gov
Call (916) 419-2500