AB 2991: Preparing for Electronic Payments to Alcohol Wholesalers

Updated November 8, 2026. This article was first written in late July 2025, shortly after ABC updated its guidance on Assembly Bill 2991. It describes the law before its January 1, 2026 effective date, when its requirements were still upcoming. Anything that happened later is kept separate in the “Current context” section near the end. It is general information, not legal or financial advice.

A back-office law with front-door consequences

Most alcohol laws that make headlines involve guests: ID checks, drink spiking, open containers. Assembly Bill 2991 is different. It governs how bars, restaurants, liquor stores, and markets pay their beer, wine, and spirits wholesalers. That sounds like a bookkeeping detail until a delivery driver cannot accept a check and a Friday order goes back on the truck.

ABC issued an industry advisory on AB 2991 on April 7, 2025, and updated it on July 23, 2025 to reflect new guidance. According to the advisory, AB 2991 (Valencia, Chapter 426, Statutes of 2024) goes into effect January 1, 2026, and will require payments from retailer licensees to wholesaler licensees for alcoholic beverage deliveries to be made by electronic funds transfer, or EFT. This guide explains what the law will require, why July 1, 2025 already matters, and what operators should do before January.

Who the law covers

ABC’s advisory says the law governs payments from retailer licensees to wholesaler licensees for alcoholic beverage deliveries. It does not apply to deliveries occurring under a manufacturer license type. A restaurant buying from a beer distributor or a spirits wholesaler is covered. A purchase directly from a winery’s manufacturer license is outside this particular rule, though other payment and credit laws still apply.

The three core requirements

ABC summarizes three key requirements, among others in the law:

1. The wholesaler initiates. The wholesaler must initiate the EFT through a withdrawal of funds from the retailer’s bank account. ABC notes that initiating a withdrawal can include simply generating an invoice requesting payment.
2. A 30-day deadline. The EFT must occur by the expiration of the 30th day from the date of delivery.
3. Each side pays its own fees. Costs related to electronic payment services must be paid by the party that incurred them. Wholesalers cannot pay a retailer’s electronic payment fees, retailers cannot pay a wholesaler’s, and service fees must be applied equitably to match the services each licensee receives.

The fee rule fits California’s broader separation between suppliers and retailers. Under this law, neither side may absorb the other’s processing costs.

Why July 1, 2025 already matters

The law takes effect for deliveries on and after January 1, 2026, but one date in it has already passed. ABC explains that the wholesaler has authority to select the third-party payment processor used for the EFT. A wholesaler and retailer may agree on a processor. But if they cannot agree, they must use the third-party payment processor the retailer used as of July 1, 2025 to pay for wholesale alcohol purchases. If the retailer did not use a third-party processor by July 1, 2025, the parties must use the processor selected by the wholesaler.

That means a retailer’s payment arrangements on July 1, 2025 can determine the default in a future dispute. Operators should document now which processor, if any, they were using on that date for wholesale alcohol purchases. A screenshot of the account, a statement, or a payment confirmation dated around July 1 could matter later.

What ABC will and will not do about processors

The advisory states that AB 2991 does not define “third-party payment processor,” though ABC infers it is a party other than the wholesaler or retailer that serves as the payment medium. ABC also states that it does not approve or sanction payment processor companies or their systems. In response to a question about whether only one processor meets the law’s standards, ABC answers: “No. There are many different payment processors that facilitate electronic payments.”

Operators approached by vendors claiming to be the “ABC-approved” or only compliant processor should treat that claim with skepticism.

Credit cards and EFTs

ABC states that for purposes of this law, a credit card is not considered an EFT. However, wholesalers may accept credit card payments in lieu of an EFT, as long as the retailer bears the cost of the transaction. Accepting credit cards is at the wholesaler’s discretion. A restaurant that prefers to pay by card for cash flow reasons should ask each wholesaler now whether it will accept cards and on what terms.

When cash or checks are still allowed

The advisory lists four exceptions where cash, check, or money order may be used:

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

The second exception connects to ownership changes. A buyer operating on a temporary permit during a license transfer already faces payment restrictions under section 24045.5, as explained in our guide to ABC license transfers, escrow, and temporary permits. AB 2991 preserves cash and check options for those businesses.

Practical steps before January 1, 2026

Inventory your vendors. List every wholesaler you buy from, how you pay each one today, and whether that payment flows through a third-party processor.

Document your July 1 processor. Save evidence of what you used on or around July 1, 2025.

Talk to each wholesaler. Ask which processor they plan to use, what fees you will incur, whether they will accept credit cards, and how invoices will trigger withdrawals.

Review bank access. An EFT initiated by the wholesaler means authorizing withdrawals from your account. Decide which account will be used, who can authorize it, and how you will reconcile withdrawals against deliveries.

Plan cash flow around the 30-day window. Payment must occur by the 30th day after delivery. Busy summer weekends and holiday stock-ups can create large withdrawals close together.

Train receivers. The person who signs for deliveries should understand the new process. A receiver accustomed to handing over a check needs to know what changes and whom to call if a driver has questions.

Budget for fees. Because each party pays its own processing costs, expect some new charges.

Questions to ask each wholesaler

• Which third-party payment processor do you plan to use for EFTs?
• Will I need to create an account with that processor, and what will it cost me?
• Will you accept credit cards in lieu of an EFT, and at what cost to me?
• What triggers the withdrawal: the invoice, the delivery, or a scheduled date?
• How will I see the invoice before funds are withdrawn?
• Whom do I call if a withdrawal looks wrong or a processor goes down?

Write down the answers and the date. If a dispute arises later about which processor applies, those notes will help.

Internal controls for wholesaler withdrawals

Letting a vendor initiate withdrawals from a business account calls for basic controls. Use a dedicated account for alcohol purchases if possible, so withdrawals do not compete with payroll. Match every withdrawal to a signed delivery receipt and invoice. Limit who can change bank details or processor settings, and require a second person to approve changes. Review the account weekly during the first months of 2026. These steps are not required by AB 2991, but they protect the business when money moves automatically.

Common misconceptions

“ABC will tell me which processor to use.” ABC says it does not approve or sanction processors.

“A credit card counts as an EFT.” ABC says it does not, though wholesalers may choose to accept cards with the retailer bearing the cost.

“The law already applies.” It applies to deliveries on and after January 1, 2026. Only the July 1, 2025 processor reference date has passed.

A small-operator example

Consider a family-owned restaurant with a Type 47 license that has always paid its beer distributor by check on delivery and its spirits wholesaler by check within the credit period. Under AB 2991, starting with deliveries in January 2026, both wholesalers will initiate withdrawals from the restaurant’s bank account, and payment must occur by the 30th day after each delivery. The owner checks her records and finds she paid neither wholesaler through a third-party processor on July 1, 2025. If she and a wholesaler cannot agree on a processor, the wholesaler’s choice will control. She calls both wholesalers in August, learns which platforms they use and what fees she will pay, and sets up a dedicated account for alcohol purchases. By December, she has tested a withdrawal with each one. She also moves her largest holiday stock-up earlier in December so that its payment window does not collide with January rent, and she shows her bar manager, who signs for most deliveries, how to match each invoice to the withdrawal.

Why this matters for compliance culture

Payment rules can seem far removed from responsible service, but ABC enforces both. Clean books, documented vendor relationships, and timely payments are part of operating a license the department sees as well run. If an operator ever faces an accusation, a business that can show orderly records in every area starts from a stronger position. Our preview of California alcohol laws for 2025 covers other changes licensees faced this year.

Current context as of November 8, 2026

As read for this update, ABC’s AB 2991 advisory still shows the April 7, 2025 date and the July 23, 2025 update note, and still describes the January 1, 2026 effective date, the 30-day payment window, the July 1, 2025 processor default, the credit card option, and the four cash or check exceptions. Separately, ABC issued a November 5, 2025 advisory, “Tied House Reminder: Payments Between Retailers and Suppliers,” reminding licensees that Business and Professions Code sections 25500 and 25502 generally prohibit suppliers from furnishing money or things of value to retailers, and that a retailer inducing such payments also violates the law. Operators should consult ABC’s current advisories and the statute before relying on this summary.

The bottom line

AB 2991 turns wholesaler payments into wholesaler-initiated electronic transfers starting with January 1, 2026 deliveries. Document your July 1, 2025 processor, talk to every wholesaler now, plan cash flow around the 30-day window, and train whoever signs for deliveries before the first January truck arrives.

Sources

1. ABC: AB 2991 Guidance: Electronic Payments Between Retailers and Wholesalers (Apr. 7, 2025; updated July 23, 2025)
2. ABC: Tied House Reminder: Payments Between Retailers and Suppliers (Nov. 5, 2025, current note)

This article is general information, not legal advice.