The hospitality industry in California is facing a big change. A new law will require all local retailers to pay wholesale alcohol invoices via electronic funds transfer (EFT). This new regulation applies to beer, wine, and distilled spirits, and businesses should be in compliance by December 31, 2025, to avoid any delivery disruptions once the law takes effect. EFT modernizes how alcohol invoices are processed with faster, safer, and more secure payments. For businesses in the hospitality industry, staying compliant while keeping operations smooth is a priority, and Paperchase, in partnership with Fintech, is here to help.
California EFT Definition and Stipulations
California regulations describe EFT as “the transfer of money electronically from one bank account to another, either within a single institution or between multiple institutions, using computer-based systems.”
Under the law, alcohol distributors must choose a third-party payment processor to handle electronic funds transfers. Additional important clarifications include:
- California’s 30-day credit limits remain unchanged and at the wholesaler’s discretion
- Electronic payments include credit cards, but the retailer must pay the transaction fee for each credit card transaction
- Wholesalers and retailers must pay their own costs for EFT services (neither party may pay for the other)
- Wholesalers must initiate the payment process – this can be accomplished by uploading invoices to Fintech, for example
- Wholesalers will be responsible for selecting which third-party payment platforms they use, but there is an exception for retailers already using a third-party payment platform
This situation mirrors what occurred in Michigan in 2023; however, unlike Michigan, there are no provisions allowing wholesalers to remove retailers from EFT due to repeated bank returns for insufficient funds.
To learn more about the California EFT law or to sign up for Fintech’s free EFT service for retailers, visit their page here.
Why Early Adoption Is Key
Switching to EFT payments ahead of the deadline offers multiple benefits. Early adoption means businesses have time to:
- Test and adjust their bank filters to ensure smooth transactions
- Train staff on EFT systems and processes
- Utilize tools like automated payment reports and reconciliation features to streamline operations
Waiting until the last minute could lead to disruptions, legal risks, or even missed payments. By transitioning early, retailers can ensure their operations remain compliant and uninterrupted.
How Paperchase and Fintech Simplify the Transition
At Paperchase, we specialize in helping the hospitality industry manage accounting operations efficiently. Paperchase manages cash flow for alcohol invoice processing to ensure our clients remain compliant. That’s why we’ve partnered with Fintech, a leading payment automation platform, to help our clients prepare for the EFT law while simplifying their invoice processes.
Paperchase works with Fintech’s software to streamline invoice processing for businesses of all sizes in the hospitality industry. With over 34 years of experience, Fintech’s platform automates EFT payments, eliminates manual invoice data entry, reduces errors, and ensures full compliance with the new law—all while saving you time and resources.
Let Paperchase and Fintech Support Your Business
As the deadline approaches, it’s crucial to have the right systems in place to adapt to California’s alcohol EFT law. Paperchase can help your business navigate these changes seamlessly. By combining our expert accounting services with Fintech’s advanced payment platform, you’ll be prepared to handle EFT payments with ease.
Don’t wait until the deadline. Transition to EFT early with Paperchase and Fintech to stay ahead of the curve. Contact us today to learn how we can help your hospitality business comply with the new EFT requirements while simplifying your accounting operations.
