If you sell or distribute alcohol in California, AB2991 is about to change the way you do business. Starting January 1, 2026, every payment from a retailer to a wholesaler for beer, wine, or spirits must move through electronic funds transfer. No more checks, no more cash, and no more excuses for late payments clogging up your cash flow.
This is more than a small tweak to the Alcoholic Beverage Control Act. AB2991 rewrites payment timelines, puts wholesalers in charge of selecting the payment processor, and even lays out who covers transaction fees.
If you’re a retailer, understanding these rules will keep you compliant and avoid costly penalties. If you’re a wholesaler, this law gives you new control over how and when you get paid.
This guide discusses exactly what AB2991 requires, why it matters, and how to prepare your business before the new rules kick in.
Key Takeaways
- AB2991 mandates electronic payments for alcohol transactions in California starting January 1, 2026.
- Retailers must pay wholesalers within 30 days of delivery or face penalties beginning at day 42.
- Wholesalers select the payment processor, gaining control and predictability in cash flow.
- Electronic payments eliminate paper checks, requiring updated contracts and digital workflows.
- Platforms like Nickel simplify compliance with free ACH transfers and QuickBooks integration.
- Technology solutions help automate payment tracking and reduce disputes.
- Start preparing now with Nickel to stay ahead of compliance requirements and streamline cash flow.
AB2991 Explained
Assembly Bill 2991, signed into law in September 2024, is about to shake up how alcohol retailers and wholesalers handle payments in California. Starting January 1, 2026, every payment for beer, wine, or spirits between retailers and wholesalers must be made electronically.
It eliminates the possibility of cash and checks payments, allowing for a more secure and streamlined payment process through electronic funds transfer (EFT).
Here’s the big shift: retailers will have 30 days from delivery to pay via EFT, and wholesalers get to choose the third-party payment processor that handles those transactions. The law even spells out who covers service fees, bans rebates from processors, and sets strict rules for handling late payments or failed transfers.
Why does this matter? Because it kills the old, slow payment habits that left wholesalers chasing money and retailers juggling timelines. If you’re in alcohol distribution, AB2991 forces you to modernize, or risk compliance issues and penalties.
Get started with Nickel and take advantage of its 100% free ACH transfers to modernize your workflow and get compliant with AB2991.
Who AB2991 Affects
AB2991 zeroes in on California’s alcohol industry, specifically retailers and wholesalers dealing in beer, wine, and spirits. If you sell or distribute alcohol, this law changes how your payments work starting January 1, 2026.
Retailers Face Stricter Payment Rules
If you’re a retailer, AB2991 forces you to pay wholesalers electronically within 30 days of delivery. Miss that window and you could face late fees, lose credit terms, or be forced into cash-on-delivery arrangements until you’re caught up.
Wholesalers Gain More Control
Wholesalers get the upper hand under this law. You’re the one choosing the third-party payment processor, and you gain clearer leverage when payments are late. Faster, more predictable cash flow means less chasing down invoices and fewer disputes.
Why It Matters for the Entire Alcohol Industry
AB2991 forces everyone from boutique wine shops to major distributors to modernize payments and stay compliant. If you’re not ready, you risk penalties and payment headaches. If you prepare now, you’ll start 2026 ahead of the curve.
To find out more about electronic payments in California, read our guide on the new California credit card surcharge laws.
AB2991's Payment Timeline Requirements
AB2991 has fairly strict requirements regarding when payments have to be made. Here’s what you need to know about the new payment deadlines and late payment fees as set out in AB2991.
30-Day Electronic Payment Deadline
The clock starts the moment alcohol is delivered. Retailers have 30 days from the delivery date to complete payment via electronic funds transfer (EFT). Miss that deadline and things get ugly fast: wholesalers can switch you to cash-on-delivery terms until your account is cleared.
42-Day Late Payment Penalties
Fail to pay by day 42, and the financial pain escalates. Wholesalers are required to tack on a 1% charge on the unpaid balance starting on day 43, plus an additional 1% every 30 days the balance remains unpaid. That’s on top of losing credit privileges until you catch up.
Who Controls the Payment Processor?
Wholesalers get the power here. They pick the third-party payment processor that handles the transfers, though both parties can agree on a provider. If no agreement is reached, the wholesaler’s choice stands - thanks to 100% free incoming and outgoing ACH transfers, wholesalers and retailers alike benefit from Nickel.
Limited Exceptions to Electronic Payments
Paper payments aren’t completely dead, but the list of exceptions is tight: bounced EFTs, temporary service outages, new retailer licenses within 30 days, or temporary/interim permits. Outside of those scenarios, expect every transaction to be digital.
Why This Matters for Your Cash Flow
These timelines put an end to the slow-pay habits that have plagued the alcohol supply chain for decades. Retailers must plan their cash flow carefully, while wholesalers finally get a structured system to enforce prompt payment without endless chasing.
How AB2991 Affects Your Business Operations
AB2991 is a full-on shift in how alcohol payments work in California. If you’re a retailer or wholesaler, this law forces you to rethink contracts, payment processes, and cash flow management before January 1, 2026.
Say Goodbye to Paper Checks and Old Habits
Under AB2991, every payment from retailer to wholesaler must be electronic. No exceptions unless you’re dealing with a bounced EFT, a temporary permit, or a system outage. That means your entire workflow, from invoicing to settlement, needs to go digital.
Update Your Contracts and Terms
Payment terms that allowed flexibility (or just plain delays) won’t cut it anymore. Retailers must stick to the 30-day EFT deadline, and wholesalers now have the authority to choose the third-party processor. Your agreements need to spell this out clearly or risk confusion, disputes, and penalties.
Automate or Fall Behind
Manual tracking won’t survive under AB2991. Retailers should be using accounting tools or ERP systems that flag upcoming deadlines and handle automatic transfers. Wholesalers should be ready to integrate their processor choice into their invoicing and collections process so they’re not chasing payments manually.
Plan for Cash Flow Shifts
The 30-day payment window tightens cash cycles across the entire supply chain. Retailers will need tighter inventory and cash management. Wholesalers finally get more predictable payment timing, but should plan for enforcement when accounts slip past 30 or 42 days - including applying late fees immediately.
Technology Solutions for AB2991 Compliance
AB2991 forces California alcohol retailers and wholesalers to overhaul their payment processes. This means you need a platform that’s fast, accurate, and built to handle high-value payments without extra fees.
Why Nickel Is Perfect for AB2991 Compliance
Nickel stands out as the ideal payment solution because it offers 100% free ACH transfers - both incoming and outgoing.
That means retailers can pay wholesalers electronically without racking up transaction fees, and wholesalers can collect payments without losing margin to processing costs. For businesses already squeezed by tight alcohol industry margins, those savings add up fast.
Nickel also supports high-value transactions up to $1 million and settles payments twice as fast as most competitors, which is critical when you’re working under AB2991’s 30-day payment deadline and 42-day penalty threshold. Every payment is settled individually, not batched, making reconciliation with your bank and accounting software effortless.
Native QuickBooks Integration
Most alcohol businesses already use QuickBooks for accounting. Nickel integrates natively with QuickBooks Online, syncing invoices, bills, and payment statuses in real time.
No manual data entry, no CSV uploads, no wasted time chasing mismatched records. If a payment is late, you’ll know instantly - allowing you to enforce penalties or switch accounts to cash-on-delivery terms right away.
Built for Scale and Simplicity
Whether you’re a boutique wine retailer or a large-scale distributor, Nickel’s zero setup time and unlimited free ACH transfers make compliance painless.
Onboarding takes minutes, and once connected, every transaction is tracked, documented, and compliant with AB2991’s requirements. You get transparency, speed, and cost savings all in one platform. For more information about Nickel’s free ACH transfers, read our guide on the best way to accept large payments.
Using AB2991 as a Competitive Advantage
AB2991 does more than mandate electronic payments; it creates a chance for alcohol businesses to rethink cash flow and operational efficiency. Retailers can use this shift to adopt faster systems, reducing disputes and avoiding penalties.
Wholesalers gain control over payment processors, improving predictability and freeing up time previously spent chasing overdue invoices.
Integrating platforms like Nickel turns compliance into an operational edge by providing free ACH transfers, seamless QuickBooks integration, and real-time reconciliation. Businesses that prepare now can use AB2991 to tighten margins, serve accounts more efficiently, and position themselves as reliable partners in California’s evolving alcohol market.
The companies that embrace this change early will stand out as more organized, compliant, and easier to work with, turning a regulatory requirement into a competitive advantage.
Ready to streamline your payment processes for AB2991 compliance? Get started with Nickel's free ACH platform and see how modern payment technology can simplify compliance while improving your cash flow management.
Frequently Asked Questions
What Types of Alcohol Transactions Are Covered by AB2991?
AB2991 applies to all payments between retailers and wholesalers involving beer, wine, or spirits. This includes deliveries from large distributors and boutique producers alike. It does not extend to direct-to-consumer sales or transactions outside California, which remain subject to separate regulations.
How Will Late Payment Penalties Be Enforced Under AB2991?
If payment is not made within 30 days of delivery, wholesalers may revoke credit terms and require cash-on-delivery. At day 43, a 1% penalty applies to the outstanding balance, with additional 1% charges every 30 days until paid. Enforcement is automatic and outlined in the statute.
Can Retailers and Wholesalers Negotiate Which Payment Processor Is Used?
Yes, both parties may mutually agree on a payment processor. If no agreement is reached, the wholesaler has final authority to select the processor. This ensures wholesalers maintain control over cash flow and simplifies compliance with AB2991 timelines.
Are There Any Exceptions to Electronic Payment Requirements?
Exceptions are limited to specific scenarios, such as bounced transfers, temporary outages, or new licenses issued within 30 days. In these cases, paper payments may be used temporarily. All other transactions must comply with the electronic funds transfer requirement.
How Does AB2991 Impact Small Retailers With Limited Technology?
Small retailers must adopt electronic payment solutions, but cost-effective options like Nickel make compliance easier. Nickel offers free ACH transfers and requires no specialized hardware, making it accessible for businesses transitioning from cash or checks to digital payments.
How Should Businesses Prepare Before the January 2026 Deadline?
Begin by updating contracts to reflect electronic payment terms and training staff on new processes. Implement compatible software like Nickel for seamless ACH transfers and real-time tracking. Testing systems ahead of time avoids compliance gaps and positions businesses for a smooth transition.
