In the following years after Prohibition ended 83 years ago, cash, check, and money orders became the standard for how retailers and customers paid for alcohol. Because it took decades until EFT payment methods emerged, it's a wonder so many alcohol retailers managed to make any change.
In truth, not all have to this day. After eight decades, you can see why some alcohol retailers feel more comfortable using old payment methods to get paid. You're maybe one of them after operating a family liquor business for several generations.
Regardless, outdated payment processes pose major problems when dealing with cash, checks, and money orders. No doubt you've experienced losing cash, or perhaps theft. Then you have checks that sometimes bounce from customers or suppliers.
After so many of these setbacks, you're may want to make a change. To see why EFT payments offer a competitive advantage in the alcohol industry, it's worth taking a look at the history of electronic funds transfers and beer payments. You'll see how far we've come technologically and how it's changing the way alcohol businesses maintain cash flow.
The Earliest Form of EFT Payment Methods
Wire services became the first method of transferring money, and these originate back to the late 19th century. Not long after, Western Union became the go-to company to do these money transfers into the 20th century. They still offer money transfers, though many other more efficient services exist specifically for beer payments.
When prohibition ended, most alcohol establishments stuck with using cash and checks, though technology started changing by the 1960s. A primitive form of mobile B2B payments started then called Electronic Data Interchange.
With the above technology, some industries began experimenting with eliminating paper payments. This created problems due to conflicts on which format to use. Finally, an agreement took place in the 1970s, despite credit cards becoming a more popular method for payments.
When EFT Payment Methods Began
Not until the 1990s did the technology we're familiar with begin to shape EFT payment systems. It took some time for states to declare EFT payment methods a cash equivalent, with Florida being one of the first in 1990. Eventually, more states adopted EFT payment methods for alcohol, despite some creating major restrictions.
In some prohibition states, EFT payment methods have specific rules, like using a distributor to initiate the money transfer. Some states require a third-party provider to send the money. Plus, you'll find other states that request a specific time frame during transfer of funds.
Within a credit state, EFT payment methods don't have to occur within 24 hours. Still, procedures on payment dates depend on a state's regulations.
The Benefits of Using EFT Payment Methods
With EFT payment methods to handle your alcohol business payments, your money is transferred into your account immediately. No more do you have to worry about cash getting lost or stolen. You eliminate risk non-honored checks and save time processing cash or money orders.
Most importantly, you gain the tools to maintain profitable cash flow at all times. When using a digital platform to conduct mobile EFT payment methods, you'll know when the money is in your account and get faster non-sufficient fund notices. With data readily available in the cloud, it leads to more accurate reconciliations, making fewer headaches for your accounting department. And electronic commerce equipment investments aren't needed other than having a bank account.
At iControl, we're a third-party provider of EFT payment methods for beer, wine, spirits and so much more for retailers, distributors and suppliers in the industry. Clearly, there are many advantages for retailers and vendors who use EFT payments methods. Contact us to request a custom demo of our platform and learn how your business can benefit from advanced payment processing.