Even though alcohol consumption is connected with negative health effects and issues, alcoholic beverages are a hugely important part of culture and society as we know it. This means that there’s always demand for alcoholic businesses like liquor stores and online wine merchants, and entrepreneurs can make a lot of money by getting into the alcohol industry.
Running any kind of business requires a lot of hard work, planning, and preparation, and this is especially true in the alcohol industry. This particular industry has a lot of rules and restrictions in place, such as age limits and licensing. Alcohol business owners need to keep up with these rules and regulations, as well as making sure to have their own alcohol merchant accounts, as well.
This guide will cover all you need to know about alcohol merchant accounts, including what they are, why they are so important in today’s world, some of the challenges you can face when applying for alcohol merchant accounts, and how to get one.
The High Risk Alcohol IndustryThe alcohol industry has been around for a very long time and is centered around the creation and sale of alcoholic beverages, from simple bottles of beer to high-end, small batch gins and whiskeys from exclusive distilleries across the globe.
In the past, many alcohol businesses were brick and mortar locations, like liquor stores and wine shops. But in more recent times, the industry has started to move online in a big way, with more and more customers shopping for alcohol online and placing orders for wine, whiskey, rum, and craft beer from the comfort of their own home.
This has led to some big changes in the way the average alcohol business is run; modern day alcohol businesses now have to have websites, social media profiles, and online payment portals to be able to accept payments from their customers. But in order to do that, you have to have an alcohol merchant account.
So what exactly is an alcohol merchant account? How do alcohol merchant accounts work? And why do you need an alcohol merchant account to run an online alcohol business like a wine subscription service or craft beer eCommerce store? Well, in order to understand what alcohol merchant accounts are, we first need to understand the basic definition of a merchant account.
If you’re unfamiliar with the concept, a merchant account is basically a type of business account aimed at businesses that carry out business online and need payment processing for online credit and debit card payments, otherwise known as card-not-present transactions. In other words, a merchant account is what makes it possible for your business to receive electronic payments from customers.
In a typical transaction, the money goes from the customer’s account into the merchant account for processing, before then being passed on to the business’ main business account. The merchant account is a sort of “middleman” for the process, and in today’s world, with so many transactions happening in this way, having an alcohol merchant account is absolutely vital.
So, we can see that alcohol merchant accounts are a real necessity for businesses that are involved in the alcohol industry and need to receive a lot of their payments online or over the phone. However, getting an alcohol merchant account isn’t as easy as you might think. In fact, many banks and payment processors refuse to offer alcohol merchant accounts to alcohol-based businesses.
This is because the alcohol industry is often classified as a “high risk” industry and linked with high risk credit card processing. In other words, banks and other financial institutions regard alcohol businesses as being too risky to work with and prefer not to offer accounts to these kinds of businesses.
Why is this the case? Well, there are a few reasons behind it. One of the main issues is the fact that the alcohol industry has so many rules and regulations, such as age limits. This can cause problems. For example, if an underage customer uses a parent’s credit card to buy alcohol online, the parent may find out and request a chargeback, causing lots of fees and drama for the payment processor involved in the transaction.
Another issue is the fact that some banks and merchant services worry that associating themselves with alcohol businesses could tarnish their public image, due to certain negative connotations associated with the alcohol industry. This, combined with the higher-than-average chances of fraud and chargebacks, means that when it comes to alcohol merchant accounts, many banks will just say no.
So what can you do if you want to run an online alcohol merchant business like an alcohol e-shop, wine club, or craft beer subscription service but can’t get a bank to give you an alcohol merchant account? Well, this kind of situation can feel almost impossible to escape, but help is at hand in the form of Shark Processing.
At Shark Processing, we specialize in high risk merchant accounts for companies that have to deal with high risk payment processing. We’re here to help businesses, like those in the alcohol industry and other high risk industries, who face regular rejections from their usual banks and payment partners, and we’ve got out own extensive network of trusted banks to help out.
Our team has years of combined experience in handling high risk payment processing and high risk merchant accounts, and we know what it takes to provide high risk businesses with the ideal merchant accounts they need, complete with competitive rates and reliable support. Get in touch with the team today to find out what we can do and how we can help you get an alcohol merchant account.
