Alcohol Merchant Account And Credit Card Processing
- Nathan Beck
Alcohol Merchant Account & Credit Card Processing
The market for alcohol online sales and delivery has been bubbling up significantly over the past few years. This growth has been driven by several trends, including changes in consumer behavior, and advancements in technology like the ability to digitally verify the age of purchasers. Covid 19 also led to shifts in the regulatory environment. Many regions have relaxed their alcohol delivery laws to adapt to consumer needs, making it easier for businesses to operate and for consumers to receive their orders. This has opened up new opportunities for companies to expand their reach and cater to a broader audience.
Durango Merchant Services is here to help you open a merchant account and begin processing payments. Our expertise includes helping manage chargebacks, setting up fraud detection & prevention systems and negotiating with banks to get you the best payment processing rates possible.
Who is Durango Merchant Services?
Durango Merchant Services, established in 1997, specializes in payment processing for high-risk industries typically ignored by traditional banks and processors. We serve a variety of sectors, including brick-and-mortar liquor stores, alcohol delivery services, online liquor sales, and membership clubs. Recognizing the unique challenges of the alcohol industry, we deliver tailored services to ensure reliable payment solutions for alcohol-related businesses. Our mission is to provide support and customized payment processing options that meet the specific needs of these sectors, helping them succeed despite industry complexities.
What Sets Durango Merchant Services Apart from the Rest?
- Deep understanding of the high-risk sector
- Robust network of banking relationships
- State-of-the-art payment processing software
- Customer specific consulting to help get approval
- Omni-channel payment support
- Recurring billing capabilities
- 24-48 Hour Payouts
- Focusing on the growth and stability of our clients
- Personal account manager with 10+ years of experience
- eCheck Processing through ACH
- Solid reputation in the payment industry
- Ten's of thousands of merchants placed
- Premium service for the high-risk sector
What is an Alcohol Merchant Account for Sales and Delivery and How do I Get One?
An Alcohol Merchant Account is a specialized type of bank account that allows businesses involved in the sale of alcohol, like liquor stores, bars, restaurants, or online alcohol retailers, to process credit and debit card payments. Because alcohol sales are often considered high-risk due to regulatory complexities and potential for chargebacks, these merchant accounts are tailored to meet the unique needs of the industry. They ensure that businesses can smoothly handle transactions while complying with legal requirements, providing a reliable way for customers to pay for their purchases, whether they’re buying a bottle of wine at a store or ordering craft beer online.
Why Alcohol Credit Card Processing is Specialized & Considered High Risk:
Online Alcohol Sales & Delivery Merchant Accounts, including those for wine and beer clubs, are considered high-risk for several reasons. Firstly, the regulatory landscape for selling alcohol online is complex and varies widely between different regions, making compliance a challenging task. Secondly, the age verification process is mandatory but tricky to enforce online, increasing the risk of underage sales. Thirdly, alcohol sales often come with a higher rate of chargebacks and fraud, as dissatisfied customers might dispute charges or unauthorized purchases can occur more frequently. Lastly, the perishability and shipping constraints of alcohol add another layer of complexity, particularly for subscription services like wine and beer clubs, which must ensure timely and safe delivery. All these factors contribute to the high-risk classification of these merchant accounts.
Durango Merchant Services has been helping Alcohol Sales businesses open merchant accounts for 2 decades. We have operations in the US, Canada, the EU and beyond and our gateway is PCI compliant, a suite of fraud prevention and detection, and chargeback protection technologies. Contact us today to start accepting payments for your Alcohol sales company, when in-store, online, or delivered.
Setting up and managing an alcohol merchant account, whether for in-store, online, or delivery sales, can be quite complicated. That’s why it’s a great idea to chat with a specialist who understands the payment solutions specific to the online alcohol industry, like Durango Merchant Services. We can provide valuable insights and guidance to help you through the application process and ensure your payment processing, including your payment gateway, runs smoothly.
Read on to discover more about the alcohol sales sectors we support with our merchant services, as well as the challenges and opportunities within these industries. This way, you can focus on serving your customers and not worry about the banks.
Alcohol Sales & Delivery Businesses We Serve and Common SIC, NAICS & MCC Codes
Alcohol Merchant Account Types
- In-Store
- Online
- Home Delivery
- Distilled and Blended Liquors
- Breweries
- Wine Clubs
- Beer Clubs
- Other Alcohol Sales Clubs
Challenges and Opportunities in Securing an Alcohol Merchant Account for Your Spirited Sales & Delivery Companies
Challenge 1: Alcohol Vendors Tend to Have High Chargeback Rates
High chargeback rates are a significant challenge for the alcohol sales industry, especially for online transactions. Chargebacks occur when customers dispute a transaction, often due to dissatisfaction with the product, delivery issues, or unauthorized purchases. Online buyers might receive products that don’t meet their expectations, encounter shipping delays or damages, or find themselves victims of identity theft. Additionally, subscription services like wine and beer clubs face chargebacks from customers who forget about their recurring charges or feel they didn’t authorize them. Miscommunications about return or refund policies can also lead to disputes, causing financial losses and administrative burdens for merchants.
These high chargeback rates increase the financial risk for payment processors, making them cautious about partnering with alcohol-related businesses. Processors have to account for potential losses and the additional workload of managing disputes, which can result in higher processing fees, stricter terms, or even termination of merchant accounts.
Opportunity
To mitigate high chargeback rates in the alcohol sales industry, particularly for online transactions, businesses should take several proactive steps. First, ensure clear and detailed product descriptions to meet customer expectations and reduce dissatisfaction. Implement robust packaging and reliable shipping methods to prevent delivery issues and damages. Utilize secure payment gateways and advanced fraud detection tools to minimize unauthorized purchases and identity theft.
For subscription services like wine and beer clubs, provide clear communication about recurring charges and offer easy management options for subscriptions to avoid surprises for customers. Ensure that your return and refund policies are transparent and easily accessible, and provide excellent customer service to address any concerns promptly before they escalate to chargebacks. By focusing on these areas, alcohol merchants can reduce chargebacks, maintain good relationships with payment processors, and avoid higher fees and stricter terms.
Challenge 2: Regulatory Complexities In Alcohol Sales
Opportunity
Regulatory complexities in the sale of alcohol can be turned into an opportunity by positioning your business as a trusted expert in navigating these challenges. By Implementing and offering robust compliance solutions, including advanced age verification and streamlined licensing processes, you can differentiate your business from competitors and build trust with both customers and payment processors. Additionally, by staying ahead of regulatory changes and proactively adapting to new rules, you can demonstrate your commitment to legal compliance and industry best practices. This not only reduces the perceived risk for payment processors but also attracts customers who value the assurance of dealing with a trustworthy business. Ultimately, embracing regulatory complexities and turning them into a strength can enhance your reputation, foster stronger partnerships, and drive business growth.
Durango Merchant Services has the expertise and experience to help you navigate the requirements to succesfully open a merchant account with one of our partner banks.
Challenge 3. Age Verification In Online Liquor Sales and Delivery
Opportunity
Ensuring alcohol is sold only to individuals of legal drinking age is indeed crucial, and while it can be challenging, there are effective ways to tackle it. Merchants can implement robust age verification processes, like requiring customers to upload a valid ID during the online purchase process and using advanced software to verify these IDs. Additionally, using third-party age verification services can add an extra layer of security. For deliveries, merchants can partner with delivery services that mandate age checks upon delivery, ensuring the recipient is of legal drinking age before handing over the package. By combining these methods, merchants can effectively minimize the risk of underage sales and stay compliant with legal requirements.
Challenge 4. Increased Fraud Risk in Alcohol Delivery and Sales
The alcohol industry is susceptible to fraud, including identity theft and unauthorized transactions. This risk is higher for online sales and delivery services, where verifying the authenticity of the buyer can be more difficult.
Opportunity
Overcoming the challenge of fraud risks in the alcohol industry, especially with online sales and delivery, involves a few key strategies. First, implementing advanced fraud detection tools can help spot suspicious activities early on. These tools use algorithms to identify patterns and flag potentially fraudulent transactions. Second, incorporating strong age and identity verification processes ensures that buyers are who they claim to be, helping to prevent identity theft and unauthorized purchases. Additionally, using secure payment gateways with encryption can protect sensitive customer information. Providing clear communication and easy access to customer support can also build trust and allow for quick resolution of any issues, reducing the likelihood of disputes and chargebacks. By taking these steps, merchants can significantly reduce fraud risks and create a safer shopping experience for their customers.
Challenge 5. Perishability and Shipping Challenges in Alcohol Delivery
Opportunity
Overcoming the perishability and shipping challenges of alcohol requires a thoughtful approach. Merchants can start by partnering with reliable shipping companies that specialize in handling delicate and perishable goods. Using insulated packaging and temperature control measures can help keep products in optimal condition during transit. Implementing tracking systems allows both the merchant and customer to monitor the shipment’s progress and ensure timely delivery. For services like wine and beer clubs, setting clear delivery schedules and providing customers with regular updates can help manage expectations and reduce issues. By focusing on these strategies, merchants can ensure their products arrive fresh and in perfect condition, delighting customers and reducing operational headaches.
Durango Merchant Services is here to help you overcome the hurdles, and secure alcohol credit card processing for your spirited sales and/or delivery company.
So, now that you know why merchant accounts in the alcohol industry are considered high risk, what can you do about it?
First, know what not to do as and alcohol sales or delivery company.
Well then what you should do to get an alcohol credit card processing account?
The good news is, you’re already on the right track—you’re here, taking action!
What are you doing? You’re seeking out consultants who specialize in helping high-risk merchants find the right fit. You’re looking for alcohol sales and delivery merchant account providers who value integrity and aim for lasting solutions, not just the easiest or cheapest options. With decades of combined experience and a proven track record, we confidently consider ourselves among the best.
Here are some common strategies to help secure a alcohol sales merchant account for your company. Remember, you won’t have to do all of them. We’ll work with you to find the best solution or combination of strategies.
- Be Transparent: Clearly disclose your business type and operations to your payment processor. Hiding the nature of your business can lead to account termination and long-term difficulties in securing payment processing.
- Implement Robust Fraud Prevention Measures: Use advanced fraud detection tools and secure payment gateways to minimize unauthorized transactions and identity theft. Strong age verification processes are also essential to comply with legal requirements.
- Maintain Comprehensive Records: Keep detailed financial records and be prepared to provide at least six months of financial statements to demonstrate your ability to manage risk, fraud, and chargebacks.
- Optimize Customer Service: Provide clear communication, easy access to customer support, and transparent return and refund policies to reduce the likelihood of disputes and chargebacks.
- Ensure Compliance: Stay up-to-date with all regulatory requirements for selling alcohol, including licensing and age verification laws. Regularly review and update your compliance protocols to avoid any legal issues.
- Build a Strong Track Record: Aim to maintain low chargeback rates and manage customer disputes effectively. Over time, demonstrating your ability to manage risk can help you negotiate better terms with payment processors.
Usually, a mix of these actions will be enough to secure an alcohol sales and delivery merchant account. Sometimes, underwriters might see a red flag and reject an application. If this happens, we can try to negotiate with the bank to accept a cash reserve or deferred settlement of payments. These terms aren’t ideal, but they can secure processing when needed.
Table of Contents
- Discount rates that range between 1.95% and 4.95%
- Authorization fees ranging from: $ 0.15 to $0.25
- Monthly installments: rates ranging from $15.00 per month to $60.00 per month
- Free Application Processing
- Rolling reserve requirements that range from: 0% to10%
- Variable contract lengths including availability of month to month
- Direct financing with regular deposits
- Minimum processing: $5,000 minimum for US accounts, $50,000 for international accounts
Dive Deeper Into Alcohol Credit Card Processing for Sales and Delivery Companies
How Do I Open an Alcohol Merchant Account?
Durango Merchant Services has put together a clear and comprehensive guide designed to help potential clients know what to expect when applying to process credit card transactions in high risk industries. Our sales team and account managers are experts in payment processing and are always ready to assist, offering guidance and clarification throughout the process to help you secure a high risk merchant account successfully.
How Do I Integrate Durango Pay Gateway into My Alcohol Sales Business?
How do I increase my credit card processing limits?
Want to boost your credit card processing limits for your alcohol sales and delivery business? Here’s the strategy: demonstrate a solid track record of consistent and reliable transactions, and ensure your business finances are robust and healthy. Minimizing chargebacks and maintaining a strong bank balance can significantly improve how transaction handlers view your business. We encourage you to have an open discussion with your account manager about your expansion plans—it might just be the key to securing more favorable terms.
God made beer because he loves us and wants us to be happy.
Some Resources to Help Your Alcohol Sales & Delivery Business Thrive
We understand that finding the right inspiration and expertise can be tough, especially when dealing with the unique challenges of the alcohol sales and delivery industry. While Durango Merchant Services is great at setting up the strategies and technology you need for processing electronic payments and securing merchant accounts, we’re not alcohol industry lawyers or consultants.
If you need guidance and inspiration to adopt best practices in liquor and alcohol sales, check out the organizations below. They are dedicated to supporting businesses like yours by providing tools and insights that encourage continuous learning and a commitment to offering safe, reliable, and high-quality services.
We hope these resources inspire you to keep improving and stay focused on delivering excellent alcohol sales and delivery services.
International Options for Alcohol Credit Card Processing:
Durango Merchant Services works with several gateway processors and suppliers with sponsor banking relationships that provide both US based national and international credit card processing solutions for alcohol sales and delivery industry sectors. We can provide alcohol sales and delivery merchant accounts in the European Union, United Kingdom, Canada, US & UK Territories as well as Puerto Rico.
Additional Benefits Of Our Credit Card Processing Service For Alcohol Sales & Delivery Businesses:
If you get approved for a merchant account for your alcohol sales company with Durango Merchant Services, then you will also be eligible for other benefits that we offer, we can set you up with electronic commerce and recurring billing via our online portal. Businesses can receive the following additional benefits:
- Competitive Rates
- Accept Multiple Currencies & Deposits
- Accept Payments from Visa, MasterCard, Discover, American Express, Diners Club, China UnionPay and JCB
- Accept Google Pay and Apple Pay
- Integration with 150+ Shopping Carts
- Robust Chargback prevention and Management tools
- eCheck Processing through ACH
- Industry Leading Fraud Detection & Prevention Tools
- Dedicated Account Manager with a Decade or more of experience in the payment processing industry.
Durango Merchant Services Is Here To Help Secure Your Merchant Account for Sales and/or Delivery:
Our dedicated team has negotiated on behalf of more than 35,000 clients. We understand the back and forth and give and take of negotiating processing accounts for high risk merchants, including hundreds of alcohol sales and distribution merchant accounts.
We know that there aren’t always easy answers. But remember, there is almost always a way forward and if you can make it through the first 3 years with a good track record, life will become much easier and your business will be better for it. Read our guide to how to apply for a alcohol sales merchant account below.
