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 (electronic funds transfer) payments occurred, 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 fell into a complacency about how they get paid. You're maybe one of them after operating a family liquor business for several generations.
Regardless, you've probably noticed some major problems 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, you're obviously anxious to make a change. To see why EFT payments matter, 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's
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 do this with EFT's, 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 to eliminate dealing with paper. 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.
We all know the problems credit cards brought. It's not to say cards didn't play a part in making beer payments come about.
When EFT Payments 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's a cash equivalent, with Florida being one of the first in 1990. Eventually, more states adopted EFT for alcohol payments, despite some creating major restrictions.
In credit and credit prohibition states, EFT payments 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's don't have to occur within 24 hours. Still, procedures on payment dates depend on a state's regulations.
The Benefits in Using EFT's
With systems for B2B payments for your alcohol business, you get money 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 you save time having to do processing with cash or money orders.
Most importantly, you maintain cash flow this way to keep yourself profitable at all times. When using a digital platform to conduct mobile b2b payment processing, 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. Electronic commerce equipment investments aren't needed other than having a bank account.